Canada - English

OECD Revises Safe Harbours in Transfer Pricing Guidelines 

Global Tax Adviser


May 28, 2013


Joe Devitt
Toronto, Transfer Pricing


Brian Mustard
Montreal, International Corporate Tax


The OECD has approved new guidance on safe harbours in Chapter IV of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. According to the OECD, the new guidance provides opportunities for countries to relieve some compliance burdens and to provide greater certainty for cases involving smaller taxpayers or less complex transactions. In addition, the new guidance is intended to offer a basis for developing countries to design a transfer pricing compliance environment that makes optimal use of limited resources.

In June 2012, the OECD released a discussion draft on the revision of the "safe harbours" guidelines and on transfer pricing timing issues as part of its project to improve the administrative aspects of transfer pricing.


The OECD notes that, previously, the Transfer Pricing Guidelines took a somewhat negative tone on transfer pricing safe harbours that did not accurately reflect the practice of OECD Member countries. Also, the previous guidance was largely silent with regard to the possibility of a bilateral agreement establishing a safe harbour, even though some countries have favourable experience with such bilateral agreements.


Transfer Pricing Guideline revisions
The OECD says that its draft proposed revision of the guidance recognizes that properly designed safe harbours can help relieve some compliance burdens and provide taxpayers with greater certainty. The guidance encourages the use of bilateral or multilateral safe harbours, which may provide a significant relief from compliance burdens without creating problems of double taxation or double non-taxation. To facilitate negotiations between tax administrations, the guidance provides sample Memoranda of Understanding for competent authorities to establish bilateral safe harbours for certain classes of transfer pricing cases.


For more information, contact your KPMG adviser.





Information is current to May 28, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

KPMG Publications

Canadian multinational companies may be interested in these recent publications: