BEPS

On February 6, 2015, TEI submitted comments to the OECD regarding its BEPS public discussion draft entitled BEPS Actions 8, 9 and 10: Revisions to Chapter I of the Transfer Pricing Guidelines (Including Risk, Recharacterisation, and Special Measures). TEI’s comments emphasized the complexity of global business operations today and the difficulty that presents for applying a transfer pricing approach that is based primarily on functions.

On February 6, 2015, TEI submitted comments to the OECD regarding its BEPS public discussion draft entitled BEPS Action 10: Discussion Draft on the Use of Profit Splits in the Context of Global Value Chains. TEI’s comments focused on the need for transfer pricing analysis to begin with the contractual arrangements between related parties within a multi-national group. The Institute’s recommendations included that a profit split generally continue to be considered as a transfer pricing method of last resort.

On On February 3, 2015, TEI submitted comments to the OECD on its document BEPS Action 10: Discussion Draft on the Transfer Pricing Aspects of Cross-Border Commodity Transactions. TEI commended the OECD for its work on the draft as a step in the right direction. Among other things, TEI’s comments focused on the differences between setting transfer prices for commodities for which price quotes are available on an exchange, and other goods for which prices are available through pricing agencies.

On February 3, 2015, TEI submitted comments to the OECD regarding its BEPS public discussion draft entitled BEPS Action 4: Interest Deductions and Other Financial Payments. TEI’s comments focused on the administrative difficulties multi-national companies would have in complying with the various interest limitation options proposed in the OECD discussion draft. In particular, the Institute noted that in certain circumstances the interest limitation would disadvantage multi-national companies as compared to domestic competitors in a similar position.

On January 8, 2015, TEI submitted comments to the OECD regarding its BEPS Public Discussion Draft on Follow Up Work on BEPS Action 6: Preventing Treaty Abuse. TEI’s comments reiterated key recommendations from the Institute’s April 2014 on the same subject.

On January 13, 2015, TEI submitted comments to the OECD on its Public Discussion Draft regarding BEPS Action 10: Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services. TEI commended the OECD for its approach in the Discussion Draft as a welcome simplification to transfer pricing rules for intra-group services.

On December 23, 2014, TEI submitted comments to the OECD regarding its Public Discussion Draft on BEPS Action 7: Preventing the Artificial Avoidance of PE Status. TEI's comments focused on the need for any changes to the definition of a permanent establishment in the OECD Model Tax Convention to be clear so that taxpayers and tax authorities may apply the new definition with certainty and avoid unintended tax consequences and controversy.

On October 6, 2014,  TEI submitted comments to the Inland Revenue Authority of Singapore in response to an invitation for public comment on proposed rules governing transfer pricing documentation. Notable among its comments, TEI expressed concern that the proposed rules elevate Singapore’s transfer pricing documentation requirements to a higher level than those existing under the OECD transfer pricing guidelines ahead of final recommendations from the OECD’s base erosion and profit shifting (BEPS) project.

On September 17, 2014, TEI responded to the OECD’s request for input under Action 11 of its base erosion and profit shifting (BEPS) project, Establish methodologies to collect and analyse data on BEPS and the actions to address it. TEI recommended that the OECD clearly define what is meant by BEPS and BEPS behaviors, measure whether the actions taken pursuant to the OECD’s BEPS Action Plan lead to double taxation, and safeguard the confidentiality of taxpayer information and data used in the project, among other things.

On July 21, 2014, TEI submitted comments to the government of Ireland regarding its public consultation document OECD Base Erosion and Profit Shifting Project in an Irish Context. TEI’s comments focused on the need for certainty should the Irish government change its corporate tax regime in conjunction with OECD’s BEPS project.