Risks Redefined in Transfer Pricing Post-BEPS

Wed Aug 24 14:12:22 EDT 2016
By Sébastien Gonnet

The Institute for Austrian and International Tax Law of Vienna University of Economics and Business, through its Transfer Pricing Center, has recently announced the publication of its latest book, Transfer Pricing in a Post-BEPS World (Storck/Petruzzi (eds.) ISBN 978-90-411-6710-1 Wolters Kluwer).

NERA Vice President Sébastien Gonnet contributed a chapter to the book: “Risks Redefined in Transfer Pricing Post-BEPS.” Mr. Gonnet summarizes the revisions to section D of Chapter I of the Transfer Pricing Guidelines (TPG) which focuses on risk definition and allocation. The chapter proceeds with a critical review of the OECD revisions in consideration of other sections of the TPG, notably Chapter VI on intangibles and Chapter IX on business restructurings and of the OECD guidance on Permanent Establishments (PEs). The chapter then introduces an economically sound and BEPS-compliant process as a guide for multinational companies to design arm’s length transfer pricing systems by taking into account an appropriate place for risk allocation. This process is thereafter illustrated through a case study. The chapter concludes by providing insight into specific areas of current concern for MNEs following the updated guidance on risk allocation.