Where a tax administration has not adopted the simplified approach, and as a consequence the MNE group complies with the local requirements in that jurisdiction, such compliance would not disqualify the MNE group from the application of the simplified approach to other jurisdictions. In addition, not all MNE groups are vertically integrated and may instead have regional or divisional sub-groups with their own management and support structures. Therefore, MNE groups may elect to adopt the simplified method at the level of a sub-holding company and apply it on a consistent basis across all subsidiaries of that sub-holding company. When the MNE group elects for and applies the simplified approach, charges for low value-adding intra-group services that are or have been determined in conformity with the guidance in this subsection are determined to be in accordance with the arm’s length principle. A possible alternative approach for dealing with the issues discussed in this subsection would be the use of cost contribution arrangements, covered in Chapter VIII ...

Where a tax administration has not adopted the simplified approach, and as a consequence the MNE group complies with the local requirements in that jurisdiction, such compliance would not disqualify the MNE group from the application of the simplified approach to other jurisdictions. In addition, not all MNE groups are vertically integrated and may instead have regional or divisional sub-groups with their own management and support structures. Therefore, MNE groups may elect to adopt the simplified method at the level of a sub-holding company and apply it on a consistent basis across all subsidiaries of that sub-holding company. When the MNE group elects for and applies the simplified approach, charges for low value-adding intra-group services that are or have been determined in conformity with the guidance in this subsection are determined to be in accordance with the arm’s length principle. A possible alternative approach for dealing with the issues discussed in this subsection would be the use of cost contribution arrangements, covered in Chapter VIII ...