The Platform for Collaboration on Tax Invites Comments on a Toolkit to Help Developing Countries with Transfer Pricing Analyses
IMF News, January 24, 2017
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- The Platform for Collaboration on Tax Invites Comments on a Toolkit to Help Developing Countries with Transfer Pricing Analyses
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Bibliographic details
- Published: January 24, 2017
Overview
- Press Release No. 17/15
- Date: January 24, 2017
- Issuing office: IMF Communications Department
- MEDIA RELATIONS PRESS OFFICER: Wiktor Krzyzanowski
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- The Platform for Collaboration on Tax is a joint initiative of the IMF, OECD, UN and World Bank Group.
- The Platform developed a draft toolkit in response to a request by the Development Working Group of the G20 to assist developing countries with transfer pricing analyses, specifically addressing lack of comparables data.
Purpose and Rationale
- Objective: Help developing countries overcome lack of data on “comparables,” i.e., market prices for goods and services transferred between members of multinational corporations.
- Context:
- Transfer pricing assigns value to transactions between subsidiaries of multinational corporations and is increasingly critical in a globalized world.
- Helping developing countries build strong and credible transfer pricing regimes supports application of the G20-OECD Base Erosion and Profit Shifting (BEPS) project principles.
- The toolkit is part of a series aimed at countries with limitations in capacity to design or administer tax systems; previous Platform reports discussed tax incentives and external support for building tax capacity in developing countries.
Toolkit content and practical tools
- Title of discussion draft: A Toolkit for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analyses.
- Key components:
- Emphasis on accurately defining the transaction as the first step to improve efficiency and effectiveness of the comparables search.
- Consideration of sources of potential comparables data.
- Practical tools such as step-by-step screening templates.
- Policy options for systemic lack of comparables data, including development of safe harbors.
- Language availability:
- The toolkit is available in French and Spanish.
Minerals pricing supplementary material
- Rationale: Pricing of transactions in the extractive industries is of particular relevance to many low-income countries.
- Supplement title: Addressing the Information Gaps on Prices of Minerals Sold in an Intermediate Form.
- Contents:
- A systematic process for tax administrations to map the transformation chain for a particular mineral, identify key traded products and establish common industry pricing practices.
- Detailed case studies demonstrating the process for copper, gold, thermal coal and iron ore.
- Language availability:
- The supplementary material is also available in French and in Spanish.
Consultation process and questions for feedback
- The Platform partners seek comments by April 7, 2017 from interested stakeholders on:
- The draft toolkit.
- The supplementary material on minerals pricing.
- Aim: Finalize the toolkit in the coming months.
- Specific questions posed (respondents are not limited to these):
1. Does this toolkit effectively help address the challenges identified by developing countries in finding the data needed to carry out a transfer pricing analysis as part of a tax audit? 2. How can better use of administrative information, in a way that maintains taxpayer confidentiality, be effectively facilitated at a country and regional level? 3. How could the reliability of potential comparables from other geographic markets be tested? 4. Are there best practices or other reliable approaches for dealing with a lack of comparables not addressed in the discussion draft? 5. What other adjustments for geographic market differences could be made, and in what circumstances? How could the reliability of such adjustments be empirically tested? 6. Do the mineral pricing case studies accurately reflect market trading terms? Are there other adjustments that would be routinely made when these mineral products are sold?
- Additional note: Any other views on addressing the lack of comparables for transfer pricing analyses and on information gaps on prices of minerals sold in an intermediate form are welcome.
Submission instructions and transparency
- Comments should be sent by e-mail no later than April 7, 2017 to GlobalTaxPlatform@worldbank.org, a common comment box for all the Platform organizations.
- Please note:
- All comments received will be made publicly available.
- Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.
- Comments and input on the draft will be taken into consideration in finalising the toolkit.
Press Release No. 17/15 — January 24, 2017, IMF Communications Department.
Content in this bundle
- pr1715f
- pr1715mineralspricing
- pr1715stransferpricing
- Part I: Introduction - Addressing the Difficulties in Performing Comparability