UN Tax Committee Suggest Changes in its TP Documents

The UN Committee of Experts on International Cooperation in Tax Matters has released several reports that suggest changes to the UN’s transfer pricing manual for developing countries. Other reports addressing issues such as model tax treaty or mutual agreement procedure were released in advance of UNs annual meeting taking place in Geneva on October 11-14.

Changes in Transfer Pricing Manual for Developing Countries

The Subcommittee said the manual could be improved by the proposed re-ordering together with the additions. The Manual would be more responsive to issues of current country concern and also more in tune with rapid developments in this area.

The changes of the model include: 

  • A revised format and a rearrangement of some parts of the Manual for clarity and ease of understanding, including a reorganization into four parts as follows:
    • Part A includes substantive issues as they relate to transfer pricing;
    • Part B contains guidance on design principles and policy considerations;
    • Part C addresses practical implementation of a transfer pricing regime in developing countries; and
    • Part D contains country practices, similarly to Chapter 10 of the previous edition of the Manual. A new statement of Mexican country practices is included and other statements are updated;
  • A new chapter on intra-group services;
  • A new chapter on cost contribution arrangements;
  • A new chapter on the treatment of intangibles;
  • Significant updating of other chapters, taking account other global issues such as the relevant parts of the outputs of the G20/OECD action plan on BEPS; and
  • An index to make the contents more easily accessible (to be constructed later).

During the 12th Session of the Committee of Experts, the Subcommittee on Transfer Pricing plans to bring the new proposed version of the Manual to this Committee’s attention for its approval, with a view to its being published and publicized in Spring 2017.

Other Topics

Some of the papers that were released as part of the agenda include: Revised Draft Article and Commentary for UN Model Tax Convention; Taxation of the extractive industries; Mutual agreement procedure; Application of treaty rules to hybrid entities; Article 12 (Royalties); Article 26 (Exchange of information); Proposed BEPS-related Changes to the United Nations Model; and Taxpayer rights in cross-border tax disputes.

Source: UN - Twelfth session - Documents, TP Manual for Developing Countries


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