On March, 11th 2014, the OECD released a paper on transfer pricing comparability data and developing countries for comment. The paper sets out and briefly discusses four possible approaches to address the concerns over the lack of data on comparables expressed by developing countries.
OECD and non-OECD countries frequently express concerns about the availability and quality of financial data on transactions between unrelated parties that can be used as comparables for inter-company transactions. These concerns about the lack of available comparables are particularly pressing for developing countries. As a result, the OECD was requested by the G8 “to find ways to address the concerns expressed by developing countries on the quality and availability of the information on comparable transactions that is needed to administer transfer pricing effectively.”
Paper on transfer pricing comparability data and developing countries
The paper has been prepared by the OECD Secretariat in conjunction with the Task Force on Tax and Development. It discusses four possible approaches to begin addressing the concerns expressed by developing countries on the quality and availability of the information of comparable transactions:
- Expanding access to data sources for comparables;
- More effective use of data sources for comparables;
- Approaches to reduce reliance on direct comparables;
- Advance pricing agreements and mutual agreement proceedings.
It is an interim draft that has been released to obtain comments, suggestions and prioritisation of the potential measures identified in the paper.