On 18 December 2020, the OECD released its guidance on the transfer pricing implications of the COVID-19 pandemic (“the Paper”).1 It represents the consensus view of the 137 members of the Inclusive Framework on BEPS.
Although we understand that the process of drafting such guidelines, and obtaining a consensus from all relevant member states takes time, the guidance was published rather late in 2020. For companies that closed prior to 31 December 2020, the guidance was hence not yet available.
Considering that, in our view, the OECD Transfer Pricing Guidelines (“OECD TPG) as such already provided sufficient guidance on how multinational groups should deal with transfer pricing in exceptional circumstances, the value of this additional guidance is rather limited to some useful confirmations, insights and illustrations. We, of course, understand that in these unprecedented times, an organization like the OECD wants to proactively provide guidance to taxpayers and tax administrations.