The business federation SwissHoldings represents the interests of 61 Swiss based multinational enterprises from the manufacturing and service sectors (excluding the financial sector). SwissHoldings is pleased to provide comments on the OECD Discussion Draft of the Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services (hereafter referred to as “the Draft”).
SwissHoldings supports the introduction of a simplified transfer pricing approach for low valueadding services to minimize risks for lengthy disputes and the administrative burden for both taxpayers and tax administrations. The revised Draft should ensure
- that costs are deductible within the group (i.e., double taxation is avoided) and
- the most simple approach to document and support the deductibility of services (i.e. low
value-adding services should be excluded from the very extensive documentation
requirements as recently codified in the new Chapter 5).
Although clear principles are very important, the Draft should also provide an appropriate level of
flexibility for more complex areas such as the definition of services, cost allocation methods and
the determination of the profit mark-up.
The key success factor is a consistent application of the new principles by taxpayers and,.more
importantly, acceptance by all tax administrations, including those of non-OECD countries.
Comments of SwissHoldings on the OECD Discussion Draft regarding BEPS Action 10 (Proposed Modifications to Chapter VII of the Transfer Pricing Guidelines Relating to Low Value-Adding Intra-Group Services) of 3 November 2014 (PDF)