Taxpayer Documentation Obligations under the 2022 OECD Transfer Pricing Guidelines

Summary

This practice note discusses the transfer pricing documentation guidelines for taxpayers provided by the Organisation for Economic Cooperation and Development (OECD) in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022 (OECD Transfer Pricing Guidelines). In general, transfer pricing in the international tax context is the setting of prices with respect to transactions between commonly controlled companies in a multinational enterprise (MNE). Transfer pricing rules employ the "arm's length principle" to determine how related parties in an MNE price their transactions to determine how profits and deductions are allocated within the MNE. The OECD Transfer Pricing Guidelines in general and those pertaining to documentation are important for both MNEs, which are the taxpayers, and the tax administrations of countries in which these MNEs engage in business activity.