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Comparability and Profit Methods
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The arm’s length principle of Art. 9 of the Model Tax Convention is based on comparisons of the conditions of controlled and uncontrolled transactions. Practical guidance on comparability analysis and on the OECD authorised transfer pricing methods (whether traditional transaction methods or transactional profit methods) is found at Chapters I-III of the 1995 Transfer Pricing Guidelines. The OECD is currently reviewing its guidance on comparability analysis and on the application of transactional profit methods (i.e., the profit split methods and the transactional net margin method).

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OECD holds Consultation with Business on Comparability and Profit Methods for Transfer Pricing Purposes

19-Nov-2008

On 17-18 November 2008, the OECD held a consultation with business commentators on comparability and profit methods for transfer pricing purposes. The consultation followed the release of two discussion drafts on comparability (May 2006) and transactional profit methods (January 2008) under the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, both of which attracted very detailed responses from the business community.

The OECD pursues dialogue with the business community on comparability and profit methods for transfer pricing purposes

17-Sep-2008

A consultation will be held on 17 and 18 November 2008 with the organisations that provided written comments on the May 2006 discussion draft on comparability and the January 2008 discussion draft on transactional profit methods. The discussion drafts related to the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. See draft agenda for the consultation.

OECD releases public comments on transactional profit methods issues notes

07-May-2008

On 25 January 2008, the OECD released an invitation to comment on a series of draft issues notes in relation to transactional profit methods (i.e., the transactional profit split and the transactional net margin methods).
 

OECD invites comments on the application of transactional profit methods

25-Jan-2008

The OECD is issuing an invitation to comment on a series of issues notes that was drafted by the Committee on Fiscal Affairs' Working Party No. 6, building on experience acquired by countries in applying transactional profit methods since the adoption of the Transfer Pricing Guidelines in 1995 and on comments received from the business community.
Comments may be submitted by 30 April 2008 to Jeffrey Owens, Director, CTPA (jeffrey.owens@oecd.org).

Comparability: Business Comments on the OECD discussion draft

13-Dec-2006

On 10 May 2006, the OECD released a series of draft issues notes on comparability that was developed by the Committee on Fiscal Affairs' Working Party No. 6, building on experience acquired by countries since the adoption of the Transfer Pricing Guidelines in 1995 and on comments received from the business community in response to an open questionnaire release in 2003.

 
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The OECD's Guidelines on dealing with commercial transactions between different parts of a multinational group.

Transfer Pricing Guidelines