OECD COVID-19 TPG paragraph 83

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For example, as government assistance and the specific circumstances of the COVID-19 pandemic may vary across different markets, it may affect the comparables and the arm’s length prices of uncontrolled transactions in different ways.39 For instance, assume Company D, a member of an MNE group, provides manufacturing services and receives a domestic wage subsidy under a job retention programme offered by the government of Country D. Assume further that third party manufacturer Company E in Country E receives a domestic short-time work programme where the hours not worked by employees are directly subsidised. The services provided by Company D and Company E may be similar but the general availability and receipt of government assistance to Company D and Company E may result in a material difference in the arm’s length conditions of the transactions for the period over which the short-time work programme is in place and may not be sufficient to ensure a reliable comparison. In that case, the services provided by Company E would not be comparable for purposes of evaluating and determining the arm’s length price for Company D’s services based on the principles of Chapters II and III of the OECD TPG unless comparability adjustments to take such differences into account can reliably be made, based on an analysis of all of the relevant facts and circumstances of the Other characteristics of the government assistance that might affect comparability, depending on the circumstances, could include, for example, the duration of an assistance program and the relation between the assistance provided and the pandemic-related costs or the lost revenue.

39 Paragraph 1.112 of Chapter I of the OECD TPG on the relevance of differences across markets.






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