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Jill Weise, Managing Director and Global Head of Duff & Phelps’ Transfer Pricing practice, was recently quoted in a Law360 article titled, “OECD Considers Transfer Pricing Guidance Amid Pandemic.” The article talks about the Organization for Economic Cooperation and Development’s (OECD) current discussions in publishing guidance that would help companies and tax administrations deal with transfer pricing issues related to the COVID-19 pandemic.
As part of the 10th Annual NABE Transfer Pricing Symposium, held virtually this year, Jill interviewed the OECD’s Matt Andrew and Stewart Brant who said that discussions are leaning toward guidance in the form of frequently asked questions that will describe how the OECD's transfer pricing guidelines could apply to particular situations.
Jill commented, “For practitioners, it would be helpful if guidance addressed timing differences faced by multinationals that need to benchmark their intercompany transactions against comparable standalone businesses.”
Jill added that the very nature of that exercise involves "a backwards look" because multinationals use comparable financials that have already been completed and are in the public domain.
“Transfer pricing rules use multiyear averages that are meant to smooth out any blips that shouldn't be overly weighted. But when you have such a shock to the system, like what the pandemic has caused, there might not be enough smoothing out to get to a place where those timing differences aren't meaningful.”
Read the full story here.