UN tax committee to consider major updates to transfer pricing manual, model tax treaty
October, 14th 2016
The UN Committee of Experts on International Cooperation in Tax Matters (Committee) has released several reports in advance of its annual meeting, slated for October 11–14 in New York, revealing that significant changes to the UN’s transfer pricing manual and model tax treaty are under consideration.
A revised version of the United Nations Practical Manual on Transfer Pricing for Developing Countries, to be presented for consideration and approval at the meeting, will have a new format, according to a report of the subcommittee developing the manual.
The chapters have also undergone “significant updating” to take into account global tax issues, such as the G20/OECD base erosion profit shifting (BEPS) plan output. Moreover, new chapters on cost contribution arrangements, intragroup services, and intangibles will be added to the revised transfer pricing manual, the subcommittee said.
While most of the proposed revisions have not yet been made public, the text of new Part D of the UN manual, which describes country transfer pricing practices, was released on the UN website.
New Part D would replace material in Chapter 10 of the current manual, providing updated information about transfer pricing practices in Brazil, India, and South Africa and adding a new section describing Mexico’s transfer pricing practices. A paper titled “Introduction to Transfer Pricing,” was also released.
A draft chapter for the revised UN manual on intragroup services was released last February.
It is expected that, if approved, the new UN transfer pricing manual will be published in Spring 2017.
UN model tax treaty
The Committee also released a report of the subcommittee on BEPS outlining proposed amendments to the United Nations Model Double Taxation Convention between Developed and Developing Countries (UN model tax treaty) for consideration and approval by the Committee. The amendments address BEPS issues that arise out of or were emphasized by the OECD/G20 BEPS plan.