Platform for Collaboration on Tax’s New Toolkit Helps Countries Implement Effective Transfer Pricing Documentation Requirements

IMF News, January 19, 2021

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Canonical URL: Platform for Collaboration on Tax’s New Toolkit Helps Countries Implement Effective Transfer Pricing Documentation Requirements

Press Release No. 21/16
Date: January 19, 2021
Issuer: IMF Communications Department
PRESS OFFICER: Ting Yan; Phone: +1 202 623-7100; Email: MEDIA@IMF.org
The Platform for Collaboration on Tax (PCT) released the final version of the Practical Toolkit to Support the Successful Implementation by Developing Countries of Effective Transfer Pricing Documentation Requirements.
The PCT is a joint initiative of IMF, OECD, UN and the World Bank. The PCT Secretariat is supported by the governments of Japan, Luxembourg, the Netherlands, Norway, Switzerland, and the United Kingdom.
Toolkit web reference included in the release: https://www.tax-platform.org/

Serves as a sourcebook of guidance on implementing transfer pricing documentation requirements for developing countries.
Compiles essential information on transfer pricing documentation and analyzes policy choices and legislative options.
Includes sample legislation and examples and practices from over 30 countries.
Shows additional approaches to transfer pricing documentation and provides real-life examples and practices.

Transfer pricing: mechanism to price cross-border, intra-firm transactions; a legitimate part of MNE global transactions when compliant with international rules.
Risks: Manipulative and abusive transfer pricing can shift profits from high to low tax jurisdictions, denying countries essential tax revenues.
Transfer pricing documentation requirements are measures used by tax administrations to require taxpayers to document all stages of their transfer pricing analysis.
Tax administrations examine a large amount of information from external and internal sources to assess taxpayers’ compliance with transfer pricing rules.

A robust and clear transfer pricing documentation regime helps tax administrations:
- Collect the necessary information to ensure compliance.
- Protect tax bases.
- Reduce profit shifting.
- Raise much-needed revenues for the recovery phase (noted in connection with the COVID-19 crisis).
The toolkit aims to help countries implement effective documentation requirements while minimizing compliance burdens on business.

This is the fourth toolkit published by the PCT.
The toolkit incorporates extensive comments received from countries and stakeholders during the public consultation process in 2019.
Following the launch, the transfer pricing documentation toolkit will be presented by an expert panel at a webinar in February 2021.
French and Spanish versions of the toolkit will be available in the coming days, as well as virtual learning opportunities based on the toolkit.

Source: IMF Press Release, January 19, 2021.