BEPS Action 10: Discussion Draft on the Transfer Pricing Aspects of Commodity Transactions

Fri Feb 06 16:58:00 EST 2015
By Amanda Pletz and Dr. Emmanuel Llinares

On 19 December 2014, the OECD invited comments from interested parties on a discussion draft on revisions to Chapter I of the Transfer Pricing Guidelines (including risk, recharacterization, and special measures). This work relates to Actions 8, 9, and 10 of the Action Plan on Base Erosion and Profit Shifting (BEPS).

On 6 February 2015, NERA transfer pricing experts Amanda Pletz and Dr. Emmanuel Llinares submitted comments on the discussion draft on transfer pricing aspects of cross-border commodity transactions. The discussion draft provides revised contents on the use of the comparable uncontrolled price (CUP) method and request feedback on typical adjustments to be relied upon and pricing date of the transaction in the context of commodity pricing. In their comments, Ms. Pletz and Dr. Llinares argue that the analysis of commodity transactions should not be restricted to a discussion of the CUP method, and the application of the arm's length principle for commodities transaction should not be different from the application of the arm's length principle for any other transaction or industry.