Revision to the OECD guidelines welcomed
January 27, 2010
The proposed revisions to chapters I-III of the OECD transfer pricing guidelines have been largely welcomed by transfer pricing practitioners, who feel they address more accurately the business environment.
The proposed revision includes a change to the hierarchy of transfer pricing methods. In the 1995 guidelines, transactional profit methods, including the transactional net margin method (TNMM) and the profit split method were only to be used in exceptional cases. Meaning where there was no or insufficient data available to rely on the traditional transaction methods.
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