{"id":100005595,"date":"2026-07-23T10:42:20","date_gmt":"2026-07-23T08:42:20","guid":{"rendered":"https:\/\/swissholdings.ch\/en\/?p=100005595"},"modified":"2026-07-23T10:42:20","modified_gmt":"2026-07-23T08:42:20","slug":"swissholdings-comments-regarding-public-consultation-on-taxation-revisions-to-chapter-vii-of-the-oecd-transfer-pricing-guidelines","status":"publish","type":"post","link":"https:\/\/swissholdings.ch\/en\/swissholdings-comments-regarding-public-consultation-on-taxation-revisions-to-chapter-vii-of-the-oecd-transfer-pricing-guidelines\/","title":{"rendered":"SwissHoldings comments regarding public consultation on taxation: Revisions to Chapter VII of the OECD Transfer Pricing Guidelines"},"content":{"rendered":"

We welcome several important features of the Discussion Draft, in particular:<\/p>\n

    \n
  1. In the Introduction Section, a clearer acknowledgement that MNE groups are free to procure or in-source services as they see fit;<\/li>\n
  2. The alignment of Chapter VII with the analytical framework in Chapters I to III, as it brings conceptual coherence to the treatment of intragroup services;<\/li>\n
  3. The clearer two-step framework distinguishing between (i) the delineation of the service has been rendered and (ii) how that service should be priced, should reduce audit confusion and support more consistent application of the arm\u2019s length principle;<\/li>\n
  4. The preservation of the existing safe harbor markup rate for Low Value-Adding intragroup Services (LVAS), though we recommend some editorial simplification to avoid redundancies or confusions between Section D and Section E.<\/li>\n
  5. The inclusion of new examples is broadly helpful though substantial adjustments are needed.<\/li>\n<\/ol>\n

    While the Discussion Draft is described as not intended to change the general principles underlying the transfer pricing analysis of intragroup services, based on our practical experience its current content will generate new substantive requirements, additional documentation and administrative burden, or presumptions against established service charging models that are consistent with the arm\u2019s length principle.<\/p>\n

    Our key recommendations are summarized below:<\/strong><\/p>\n

      \n
    1. The final guidance should preserve the existing arm\u2019s length framework and avoid creating new presumptions against established intragroup service models, particularly where services are provided by group headquarters or shared service centers.<\/li>\n
    2. The benefit test should be applied in a practical and proportionate manner and should not add more burden of proof than for intragroup supply goods: proper receipt, consumption or availability of a service should generally constitute strong evidence of benefit, subject only to evidence of duplication, non-performance or shareholder activity.<\/li>\n
    3. The concept of expected economic or commercial value should not be converted into an ex ante quantification requirement, a hindsight-based outcome test, or a requirement to prove that the service was cheaper or more successful than alternatives available to the recipient.<\/li>\n
    4. The distinction between shareholder activities and chargeable services should be based on the MNE fact pattern and operating model, not on the identity or seniority of the service provider. Centralized compliance, governance, risk management, digital transformation and post-acquisition integration activities may provide direct benefits to group entities.<\/li>\n
    5. Duplication should not be presumed where central, regional and local activities coexist, especially for regulatory requirements, dual controls, transition periods, second opinions, or intentional redundancy for risk mitigation.<\/li>\n
    6. Indirect-charge methods and allocation keys should remain acceptable where they reasonably reflect expected benefits and are administrable in the circumstances. Direct charging should not be treated as inherently superior where it would increase administrative burden without improving reliability.<\/li>\n
    7. Cost-Plus and TNMM should remain available for routine or one-sided service providers, absent unique and valuable contributions or control over economically significant risks. Centralization, senior expertise, technology enablement, or non-unique know-how should not, by itself, displace these methods.<\/li>\n
    8. The Discussion Draft should be aligned with Chapter VI of the OECD Guidelines and should expressly reject any presumption that high-value, technically complex or IP DEMPE-supporting services warrant a transactional profit split. Profit split should apply only where accurate delineation and the functional or DEMPE analysis evidence unique and valuable contributions, relevant risk control or intangible ownership, and no reliable comparables. Expertise, qualifications or autonomy may affect pricing, but should not, by themselves, justify recharacterization or profit split.<\/li>\n
    9. Documentation requirements should be proportionate and should not become a mandatory checklist of item-level or task-level evidence. For recurring services, category-based documentation, reliable cost pools, reasonable allocation keys and representative evidence should generally be sufficient.<\/li>\n
    10. The low value-adding services framework should remain a genuine simplification. Failure to qualify for the simplified approach should not imply that a service is high value, nor that a mark-up above 5% is required.<\/li>\n
    11. The final guidance should provide clearer criteria for technology-enabled, AI-enabled and platform-based services, distinguishing routine support services and output-based services from transactions involving the use, transfer or creation of intangibles.<\/li>\n
    12. The examples in the Annex should not be used as de facto checklists or safe conclusions. Any reliance on examples should identify the economically relevant facts supporting the conclusion, and certain examples should be refined to avoid overextending profit split, shareholder activity or intangible characterizations.<\/li>\n<\/ol>\n

      Our hereinafter detailed comments will focus on these concerns as well as answering the questions raised in the Discussion Draft.<\/p>\n

      You can find the full statement here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

      We welcome several important features of the Discussion Draft, in particular: In the Introduction Section, a clearer acknowledgement that MNE groups are free to procure or in-source services as they see fit; The alignment of Chapter VII with the analytical framework in Chapters I to III, as it brings conceptual coherence to the treatment of …<\/p>\n","protected":false},"author":2679,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[64,53],"tags":[],"class_list":["post-100005595","post","type-post","status-publish","format-standard","hentry","category-internationales-steuerrecht","category-statements-positions"],"yoast_head":"\nSwissHoldings comments regarding public consultation on taxation: Revisions to Chapter VII of the OECD Transfer Pricing Guidelines - Swissholdings EN<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/swissholdings.ch\/en\/swissholdings-comments-regarding-public-consultation-on-taxation-revisions-to-chapter-vii-of-the-oecd-transfer-pricing-guidelines\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SwissHoldings comments regarding public consultation on taxation: Revisions to Chapter VII of the OECD Transfer Pricing Guidelines - Swissholdings EN\" \/>\n<meta property=\"og:description\" content=\"We welcome several important features of the Discussion Draft, in particular: In the Introduction Section, a clearer acknowledgement that MNE groups are free to procure or in-source services as they see fit; 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