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The game changer

This year has been a game changer for global transfer pricing. With the final release of the UN Practical Transfer Pricing Manual for Developing Countries in May and with consistent developments in the OECD's transfer pricing aspects of intangibles project – not to mention its new Base Erosion and Profit Shifting (BEPS) project – the goalposts for companies' transfer pricing compliance requirements are changing.

Transfer pricing has also been brought further under public scrutiny by parliamentary hearings in the UK and the US in particular, which have focused on the tax affairs of multinationals such as Amazon, Google, Apple and Starbucks.

At the crux of these interrogations has been how tax planning by these companies minimises tax payments in the US and the UK so effectively, while making huge profits.

However, while the public and politicians are displeased with the level of the companies' tax payments, the taxpayers say they are all acting within the boundaries of the law, and there is no evidence to dispute that their tax planning is anything but legal. The problem lies, they argue, in how the laws are drafted.

The OECD has admitted that international guidelines have not kept pace with business and that the digital industries will make a good test case for its BEPS project. It is unsurprising, therefore, that, bar Starbucks, the majority of the companies that have faced the fiercest criticism for their tax planning are in the digital industries, where it is harder to evaluate what constitutes a permanent establishment for one thing.

While it is still difficult to say what the impact of the BEPS project will be on transfer pricing, the mere publication of the UN manual has had a more tangible impact, not least because of the inclusion in it of separate country chapters from Brazil, China, India and South Africa.

One taxpayer, Han Jin Ping of Siemens China, explains what impact the China chapter will have on companies' transfer pricing affairs in this Global Transfer Pricing supplement. Combined with the useful guides from advisers about BEPS at an international and EMEIA level, and country guides from Chile, Germany, Mexico, Russia, Taiwan, Ukraine and the US, taxpayers can get a global overview of the most important changes to transfer pricing, from a developed and developing country perspective.

We hope you find this transfer pricing supplement both useful and informative. For more in-depth coverage of all the most recent transfer pricing developments around the world, including controversy case analyses, regulation updates and jurisdictional guides to audit, documentation and intangible assets, visit

Sophie Ashley

Online editor, International Tax Review

Managing editor,

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