LAST week, the Working Party No. 6’s Special Session on the Transfer Pricing Aspects of Intangibles met with private sector representatives to discuss the valuation of intangibles for transfer pricing purposes. Mr. Chris Lenon, the Chair of the BIAC Tax Committee, said that the business community wanted the Transfer Pricing Guidelines (TPG) to achieve the aims of minimising conflicts among tax administrations as well as between tax administrations and taxpayers. Multinational enterprises are encouraged to apply the guidance in the TPG to ensure that their transfer pricing is consistent with the arm’s length principle. The guidance should be sufficiently clear for all tax authorities to be able to apply it consistently.

Mr Lenon welcomed the presence of several non-OECD economies at this meeting. In terms of intangibles valuation, he thought that the aim was to arrive at a reasonable solution, keeping in mind that income-based methods are based on a series of assumptions and are therefore not an exact science. In conclusion he said that business seeks guidance which will minimise double taxation, rather than a set of prescriptive rules.

Ms. Michelle Levac, the Chair of the WP6 , welcomed the support provided by the business community to help develop further guidance in the TPG and a robust framework to minimise controversies and maximise tax certainty in relation to the transfer pricing aspects of intangibles. In her concluding remarks, she said that the discussions at this meeting had been very productive and helpful to move the OECD project forward.