On November 7, TEI submitted comments to the Platform for Collaboration on Tax--a joint initiative of the World Bank, OECD, International Monetary Fund, and United Nations--regarding its draft transfer pricing documentation toolkit for developing countries. TEI's comments were prepared under the aegis of the Institute's European Direct Tax Committee, whose co-chairs are Kris Bodson of Johnson & Johnson and Giles Parsons. Benjamin R. Shreck, TEI tax counsel, assisted in preparation of the Institute's comments.
The Platform for Collaboration on Tax is a joint initiative of the International Monetary Fund, Organisation for Economic Co-operation and Development (OECD), United Nations, and World Bank Group (collectively, the Platform). The Platform published a document entitled "Practical Toolkit to Support the Successful Implementation by Developing Countries of Effective Transfer Pricing Documentation Requirements" (the Draft Toolkit) on 27 September 2019 and requested input from interested stakeholders. I am pleased to respond to the Platform's request for input on behalf of Tax Executives Institute, Inc. (TEI).
TEI was founded in 1944 to serve the needs of business tax professionals. Today, the organization has 57 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 sound 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 2,800 of the leading companies in the world. (1)
The Platform posed four specific questions to interested stakeholders regarding the Draft Toolkit. TEI's answers to these questions are set forth immediately below.
Q.1. Does this draft toolkit effectively address all the relevant considerations for the design of an effective transfer pricing documentation regulatory system?
Generally, the Draft Toolkit addresses all the main considerations an effective transfer pricing documentation regulatory system requires. Coherence and coordination of the Draft Toolkit's approach with Action 13 of the OECD's base erosion and profit shifting (BEPS) project's transfer pricing documentation standards is critical, however. The Action 13 model is generally accepted by the vast majority of countries and is a useful method for reporting information about related party transactions and their...