Mr. Liam Lynch:

Most of the world operates with the OECD's transfer pricing standards, but these are implemented in individual countries through domestic legislation, which can differ between countries. Currently, the standards are based on the protection of each individual country's tax base. They operate as one-way standards. As such, the issue becomes a discussion between countries as to where the profit should be recognised, with each country acting in its own national interest by trying to ensure that the highest amount of profit is recognised therein as opposed to elsewhere. This is essentially how the standards are put together, although there are variations in how they are implemented. Some countries veer more away from the OECD's standards than towards them.

Within the transfer pricing regime, the one element that tends to differ substantially between countries is the amount of information and documentation that a particular tax authority might want on a particular transaction. The same transaction might result in different documentation being prepared in one country versus in another country. This leads to a degree of complexity on the one hand but, on the other, a degree of additional administration and cost for businesses. As such and if feasible, the base erosion and profit sharing, BEPS, project presents an opportunity to devise a regime that is more standardised across the world where the information is available. The standard would be set rather than be a minimum.