NERA's Comments on the OECD's Discussion Draft on Transfer Pricing Documentation and Country-by-Country Reporting

23 February 2014
By Dr. Emmanuel Llinares, Pim Fris, Dr. Harlow Higinbotham, and Sébastien Gonnet

On 30 January 2014, the Organisation for Economic Co-operation and Development (OECD) published a Discussion Draft on Transfer Pricing Documentation and Country-by-Country Reporting. In response, experts from NERA's Global Transfer Pricing Practice -- Director and Head of Global Transfer Pricing Dr. Emmanuel Llinares, Affiliated Consultant Pim Fris, Senior Vice President Dr. Harlow Higinbotham, and Vice President Sébastien Gonnet -- submitted comments on 23 February 2014. In their comments, the authors recognize the importance of the OECD work on transfer pricing (TP) documentation for both multinational enterprises and tax authorities. In their view, the work should ideally be guided by the following principles: 1) Enhance homogeneity of TP documentation regulations across countries; 2) Improve relevance of TP documentation contents; and 3) Focus on sharing information that is useful for communication between the taxpayer and tax administration. NERA experts also advocate that the analysis of how value is created within a company should have a central role in the Masterfile. With respect to country-by-country reporting, they note that the grid as proposed would have no link with any sort of economic analysis.