OECD recognises the need for change in transfer pricing

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OECD recognises the need for change in transfer pricing

The need to realign international tax and transfer pricing policy, to better integrate developing countries, has never been more apparent at the International Tax Review Global Transfer Pricing Forum.

Speakers including the OECD, the Canada Revenue Authority, the tax director for LVMH, and advisers from Baker & McKenzie and KPMG, focused on the role developing countries are playing in international business and tax policy, for their panel on changes and trends in global transfer pricing.

Caroline Silberztein, a partner at Baker & McKenzie and an ex-OECD official, said it was easier when people had never heard of transfer pricing because now it is synonymous with tax avoidance, which is not the correct conclusion.

The OECD is an obvious player in international tax policy and still holds the majority of influence. Marlies de Ruiter, head of the organisation ’s tax treaty, transfer pricing and financial transactions division, said the OECD is recognising the issues that drive transfer pricing debate: “Implementation can be subjective, however.”

De Ruiter said the purpose of the OECD’s inclusive meetings, which welcome non-members, is to promote dialogue between countries.

However “sharing thoughts to overcome problems doesn’t mean both parties always agree”.

The UN became an observer of the OECD’s Committee on Fiscal Affairs in June this year. “We are moving closer together,” said de Ruiter, “but we are not always on the same page.”

She refers to the debate, by OECD critics, that the OECD is an exclusive club that does not necessarily represent the interests of non-members.

On the development of a transfer pricing manual for developing countries, de Ruiter said she is happy that the UN states the manual is an interpretation of the OECD guidelines “but I am concerned if they are using the same standard and different words. People will interpret them differently”.

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