OECD COVID-19 TPG paragraph 82

Category: TPG2020 Guidance on the transfer pricing implications of the COVID-19 | Tag: , , ,
« | »

The comparability of open market transactions or enterprises may be influenced by the receipt of government assistance, affecting both how the parties establish their commercial or financial relations and how they price their transactions. Therefore, when performing a comparability analysis, it may be necessary to take into account the receipt of government assistance when reviewing potential comparables.






Related Guidelines

  1. OECD COVID-19 TPG paragraph 72The analysis of the receipt of government assistance as a local market feature may help to inform an analysis of whether its receipt affects the price of a controlled transaction. It may also be relevant when conducting a comparability analysis. However, the particular...
  2. OECD COVID-19 TPG paragraph 74The economically relevant characteristics of the accurately delineated controlled transaction will help in determining the potential effect of the receipt of government assistance on the pricing of the controlled transaction, if any. For instance, some of the aspects to consider in analysing the...
  3. OECD COVID-19 TPG paragraph 71In particular, by analogy to section D.6.2 of Chapter I of the OECD TPG, the analysis of the implications of the receipt of government assistance would need to consider the following factors (not only to identify reliable market comparables when they exist, but...
  4. OECD COVID-19 TPG paragraph 67Economically relevant characteristics that pertain to a controlled transaction should be evaluated: (i) when accurately delineating the controlled transaction; and (ii) to facilitate the comparison between the accurately delineated controlled transaction and comparable uncontrolled transactions, in order to price the controlled transaction.38 38...
  5. OECD COVID-19 TPG paragraph 65The terms and conditions of government assistance programmes related to COVID-19 need to be considered when determining the potential impact of these programmes on controlled transactions and when comparing their effects with those of other pre-existing assistance programmes. For instance, a number of...
  6. OECD COVID-19 TPG paragraph 73The potential effect of the receipt of government assistance on the pricing of a controlled transaction will depend on the economically relevant characteristics of the transaction, following an accurate delineation of the controlled transaction and the performance of a comparability analysis. Therefore, it...
  7. OECD COVID-19 TPG paragraph 68The extent to which the receipt of government assistance is an economically relevant characteristic may vary. An example of where government assistance may be more economically relevant is the provision of a wage subsidy, a government debt guarantee or short-term liquidity support. In...
  8. OECD COVID-19 TPG paragraph 81Under the guidance of Chapter I of the OECD TPG, the provision of government assistance to an associated party will not change the allocation of risk in a controlled transaction for transfer pricing purposes. For instance, assume Company W is a distributor that...
  1. 2018: ATO Taxpayer Alert on Mischaracterisation of activities or payments in connection with intangible assets (TA 2018/2)The ATO is currently reviewing international arrangements that mischaracterise intangible assets[1] and/or activities or conditions connected with intangible assets. The concerns include whether intangible assets have been appropriately recognised for Australian tax purposes and whether Australian royalty withholding tax obligations have been met. Arrangements...
  2. EU: Public Country-by-Country Reporting?Proposal directive of public country-by-country reporting in the EU Ministers held an exchange of views (public session) on how to take the proposed directive forward. Tax transparency is a fundamental principle in any democratic society. It enables policy makers to take informed decisions...

Related Case Law

  1. India vs. Quark Systems Pvt. Ltd. Oct 2014, ITA No.282Quark Systems Pvt. is engaged in providing customer support services on behalf of the Quark Group. TNMM had been applied as the most appropriate method for determining arm’s length income. In an audit, the tax administration rejected one of the companies selected as a comparable on the basis that...
  2. Romania vs “Milk and Dairy” A. SA, September 2020, Supreme Court, Case No 4702/2020In regards of transfer pricing A. SA had two activities – production of dairy products and distribution of milk – that had been subject to an audit by the tax authorities which resulted in an assessment of additional taxable income. The transfer pricing...
  3. Portugal vs “A S.A.”, March 2022, CAAD – Administrative Tribunal, Case No : 213/2021-TA S.A. is 51% owned by B SA and 49% by C Corp. A S.A is active in development of energy efficiency projects. In 2015 A S.A took out loans from B and C at an annual interest rate of 3.22xEuribor 12 months,...
  4. France vs Apex Tool Group SAS, March 2020, Administrative Court of Appeal, Case No 18PA00608A intercompany loan had been granted within the Apex Tool group at an interest rate of 6 percent and to demonstrate the arm’s length nature of the interest rate the borrowing company provided a comparability analyses. The analysis was set aside by the...