TPED is pleased to announce the publication of a Research Paper covering an economically sound and beneficial framework for selecting and adjusting foreign comparables, especially relevant in emerging and developing countries lacking comparables.
TPED President Sébastien Gonnet presented on the subject of the lack of comparables in Africa. He presented a proposed process for selecting foreign comparables in the absence of domestic comparables. Within this process, the country risk is a key comparability factor and the proposition involves selecting comparables from countries with similar risk profiles (and cost of doing business), proxied by the country rating. The conference was also the occasion to announce the publication in December 2019 of a Paper on the subject. The Paper is a response to the call for Research on comparables by the Platform of Cooperation on Tax (IMF, OECD, UN, WBG).
The tax challenges of the digitalisation of the economy were identified as one of the main areas of focus of the Base Erosion and Profit Shifting (BEPS) Action Plan.
In light of the high stakes and the need for a clear direction, the OECD Secretariat has developed a “Unified Approach” which is outlined in the document named “Secretariat Proposal for a Unified Approach under Pillar One”.
TPED invited to speak at IBFD 5th African Tax Symposium – Trends in International Taxation: An African Perspective, in Cape Town, South- Africa. TPED President Sébastien Gonnet presented on The Elusive Search for Comparables in Africa – a proposed process. Mr Gonnet’s presentation took place in the context of a panel covering Transfer Pricing led by Emily Muyaa.
TPED invited to speak at IBFD 4th African Tax Symposium – Trends in International Taxation: An African Perspective, in Mombasa, Kenya. TPED President Sébastien Gonnet presented on The Elusive Search for Comparables in Africa in a panel session covering Transfer Pricing in Africa, chaired by Emily Muyaa. The presentation aimed at evaluating the various options available to tax authorities and tax payers to cope with the lack of comparables in Africa. Aligned with the work done by the Platform of Cooperation on Tax (IMF, OECD, UN, WBG), Mr Gonnet discussed two options to establish local arm’s length ranges / safe harbors:
Option #1 : Leverage from local domestic available financial information;
Option #2 : Define economically-sound adjustments to non-local comparables.
TPED and WU (Vienna University of Economics and Business) Associate Professor Matthias Petutschnig launch the “Comparability Research Project (2018-2019)”. The project aims at identifying solutions to cope with the lack of comparables in emerging economies and developing countries.
The absence of domestic comparables has been pointed out by the Platform for Cooperation on Tax (IMF, OECD, UN, WBG ) as one of the major obstacle to apply the arm’s length principle in emerging economies and developing countries. In its Toolkit for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analyses, the multilateral bodies call for additional economic research, notably in the field of comparability adjustments.