Transfer Pricing News Issue 40 - September 2022
26 September 2022
Issue 40 - September 2022
It’s been almost a year since the OECD announced in October 2021 that 135 jurisdictions (a number that currently
stands at 137) had agreed to a global deal that would reallocate a portion of the largest multinationals’ profits
to the market jurisdictions where their customers and users are located. But as it turns out, reaching that
political agreement may have been the easier part of the process, given that the OECD is still trying to come up
with a rules framework to implement the goals of Pillar One of that pact.
In the months since the announcement, the OECD has issued several drafts for public comment detailing the rules
that would be adopted by participating jurisdictions to determine Amount A of Pillar One. The latest installment,
a Progress Report on Amount A of Pillar One, was released in July with a call for comments from stakeholders.
Seventy - one entities including BDO’s Global Transfer Pricing group submitted their views on the draft,
and a public consultation was held 12 September to discuss some of the views expressed in those comments.
As our article on the public consultation reveals, there seems to be little consensus on what the best path forward
is with regards to the Pillar One rules.
While the Pillar One saga continues to hold the attention of many transfer pricing observers, other developments
warrant consideration. The UK, for example, is in the process of enacting legislation that would require large
multinationals to maintain a master file, a local file and summary audit trail in the UK for transfer pricing purposes.
Israel has embarked on a similar legislative path, approving transfer pricing legislation that introduces the three-tiered documentation requirements of BEPS Action 13. And the Netherlands is also refining its transfer pricing laws,
having published a new transfer pricing decree that clarifies the application of the arm's-length principle by
the Dutch tax authorities and updates the sections on financial transactions and intragroup services.
Finally, we report on Australia’s recently released consultation paper on Multinational Tax Integrity and Tax
Transparency, which addresses what the government perceives as tax avoidance practices of multinational
enterprises (MNEs) and calls for improving transparency through better tax information reporting for MNEs.