OECD Transfer Pricing Guidelines 2016: teoretisk og praktisk analyse af prisfastsættelsesmetoder for kontrollerede transaktioner

Dina Emilie Riegels & Heidi Lykke Sørensen

Student thesis: Master thesis


During the past years, we have experienced an increased focus on transfer pricing. The Danish Tax Authorities has reported an increasing amount of tax increases especially in the period 2012-2014 where the Danish Tax Authorities increased the reported tax payments 20.3 billion. These increases could be an indication of a need for better interpretation and guidance of the OECD Transfer Pricing Guidelines 2010. To confront the tax challenges caused by the digital and global economy, OECD published a report addressing the base erosion and profit shifting in February 2013, which is their latest initiative and the kick-off for the BEPS project. This thesis examines the current guidance on transfer pricing of the OECD Transfer Pricing Guidelines 2010 and afterwards review the anticipated changes from the discussion drafts of the BEPS project. With focus on action points 8 (intangibles), 9 (risk and capital) and 10 (high risk transactions), we will analyze the revised transfer pricing guidelines in terms of the preparation of the functional and comparability analysis. The BEPS discussion drafts has an increased focus on allocation of risk and risk management, which leads to changes in the considerations on actual conduct, non-recognition and other realistic alternatives. The content from the discussion draft is expected published in a new set of OECD transfer pricing guidelines in 2016. To demonstrate the implementation of the arm s length principle with the use of the revised OECD transfer pricing guidelines, we have set up a fictive case with two scenarios: · The establishment of a principal structured MNE · A restructuring of the MNE with a split of important functions For each scenario, we have prepared a functional and risk analysis for determining the most appropriate transfer pricing method. The centralized model (principal structure) shows only limited risks and functions for each of the subsidiaries which leads to the use of TNMM net cost plus and TNMM EBIT. The relocation of significant and valuable functions(taking into account the assets used and risks assumed) to the subsidiaries results in access to an increased share of the profit allocation at group level. The most appropriate transfer pricing method to allocate the profit among multiple value-creating entities are considered the profit split residual method. The implementation of the method is divided in two stages. In the first stage the routine transactions are remunerated as TNMM net cost plus and TNMM EBIT. In the second stage any residual profit/loss will be allocated among entities, carrying out the important functions, based on their unique and valuable contributions.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages122