One of the main objectives pursued by the OECD with the BEPS project is the alignment of transfer pricing outcomes with value creation. To implement this objective, various revisions and additions have been made to the OECD Transfer Pricing Guidelines. Among these is a dedicated section on how to consider multinational enterprises’ group synergies when applying the arm’s length principle. This addition offers new guidance, where previous versions of the guidelines barely addressed the role of group synergies in transfer pricing.

In this article, Principal Ronald Bernstein, Senior Managing Director Yves Hervé, and Managing Director Vladimir Starkov take an overarching view of the development of the OECD’s guidance on group synergies (from the 1995 version to the current 2022 version). They draw conclusions about the implications for different types of synergies and how these can be addressed in the application of transfer pricing methods to achieve arm’s length results. The authors also outline the differences between situations in which one-sided transfer pricing methods are more appropriate and situations for which the profit split method would be expected to deliver a more reliable outcome.