Public consultation on the proposed revision of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations was held on 12-14 November in the OECD headquarters in Paris.

The main focus was on two major draft amendments developed by the OECD Working Party on taxation of multinational enterprises:

• draft amendments to chapter IV of the OECD Guidelines regarding provisions on the possibility to apply simplified transfer pricing requirements to particular categories of taxpayers or transactions (so called “safe harbours”);
• draft amendments to chapter VI of the OECD Guidelines on special considerations for intangibles.

It should be also noted that proposed amendments regarding safe harbours were initiated due to insufficient coverage of practices and examples of implementing such provisions.

Therefore, draft revision contains more detailed explanation of safe harbour notion, concept, and interpretation examples, as well as benefits and risks of their practical application, alongside implementation technique. Associated sample memoranda of understanding for competent authorities to establish bilateral safe harbours are also included in the draft.

Whereas draft revision of the special considerations for intangibles proposes that the whole chapter VI of the OECD Guidelines is reworded, as well as Annexes to the said chapter are supposed to be amended by supplementing those with examples illustrating application of the new provisions.

The major changes regarding transfer pricing aspects of intangibles are as follows:

• the definition of intangibles for transfer pricing purposes has been broadened;
•  the intangible related return concept has been introduced;
•  financial valuation of intangibles using discounted cash flow valuation techniques has been made possible.

The said draft documents, as well as public and business comments provided are available at the OECD home page. The proposed revision of the OECD Guidelines is planned to be adopted next year.