OECD releases Discussion Draft on the Revised Guidance on Profit Splits
The Final Report on Actions 8-10 of the BEPS Action Plan ("Assure that transfer pricing outcomes are in line with value creation") sets out the scope of the work mandated under Action 10 of the BEPS Action Plan in relation to the application of transfer pricing methods.
The discussion draft, which does not yet represent a consensus position of the Committee on Fiscal Affairs or its subsidiary bodies, aims at clarifying and strengthening the guidance on the transactional profits split method in the context of global value chains. In particular, it elaborates on two different approaches to splitting profits: transactional profit splits of actual profits and transactional profit splits of anticipated profits. It also proposes further draft guidance on the appropriate application of transactional profit split methods.