The OECD provided a short (three weeks) window for comments before the consultation closes on 23 February 2014.
When the OECD decides something in the international tax world needs updating, it typically launches a “project” among its members, brings in business input, and then issues a discussion draft. After a period of consultation and some internal debate, a revised version then appears as a formal commentary or chapter. The process often takes years. Not this time.
The BEPS initiative has “turbocharged” things so much that this discussion draft (the outcome of Action 13 on the BEPS action plan) has arrived in a little over six months.
It is worth being reminded as to what is behind the new document. Faced with squeezes on public finances and widespread media coverage of multinational corporations “squirreling away” profits in low tax locations, governments in the world’s major markets have decided something must be done. To address the issue, they feel they need greater visibility of what the problem is.
Accordingly, country-by-country reporting and changes to transfer pricing documentation have been initiated to help them.
Now that the discussion draft has been published, the questions being asked are:
- Will the proposals achieve what they set out to achieve?
- Is the extra compliance burden on companies reasonable or excessive?
- How can the final guidelines be improved to make sure both of the above are achieved?
Read a February 2014 report [PDF 106 KB] provided by KPMG International that addresses these questions: The OECD discussion draft on transfer pricing documentation and country by country reporting: 3 weeks to have your say
Contact a tax professional with KPMG's Global Transfer Pricing Services.