TEI comments on BEPS hard-to-value intangibles discussion draft.

• Position: Tax Executives Institute, base erosion and profit shifting

On June 17, 2015, TEI submitted comments on the OECD revised discussion draft on BEPS Action 8: Hard-to-Value Intangibles. The Institute's comments focused on the need to limit the use of ex post information (hindsight) by tax authorities to price previous transfers of intangible assets as such information is not used in similar transactions between unrelated parties. The Institute noted, among other things, that use of hindsight would likely result in additional controversy and disputes between taxpayers and tax authorities. TEI's comments were prepared under the aegis of TEI's European Direct Tax Committee, whose chair is Nick Hasenoehrl. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On July 19, 2013, the OECD published an Action Plan on Base Erosion and Profit Shifting (hereinafter the Action Plan or the Plan) setting forth fifteen actions the OECD will undertake to address a series of issues that contribute to the perception that individual countries' tax bases are being eroded or profits shifted improperly. Pursuant to Action 8 of the Plan, on June 4, 2015, the OECD issued a public discussion draft entitled BEPS Action 8: Hard-to-Value Intangibles (hereinafter the Discussion Draft or Draft).

The OECD solicited comments from interested parties no later than June 18, 2015. On behalf of Tax Executives Institute, Inc. (TEI), I am pleased to respond to the OECD's request for comments.

TEI Background

TEI was founded in 1944 to serve the needs of business tax professionals. Today, the organisation has fifty-six chapters in Europe, North and South America, and Asia. As the preeminent association of in-house tax professionals worldwide, TEI has a significant interest in promoting tax policy, as well as the fair and efficient administration of the tax laws, at all levels of government. Our nearly 7,000 individual members represent over 3,000 of the largest companies in the world. (1)

TEI Comments

General Comments

TEI commends the OECD for its work on hard-to-value intangibles as reflected in the short and succinct Discussion Draft. The abridged nature of the Draft makes it possible for stakeholders to provide input within the fourteen-day deadline provided, although that period is far too short for such an important issue. Regrettably, even in such a short Discussion Draft it seems the OECD still cannot produce a consensus view on this critical topic. If a consensus approach is not developed for...