HAVING REGARD to Article 5b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;

HAVING REGARD to the Declaration on Base Erosion and Profit Shifting [C/MIN(2013)22/FINAL];

CONSIDERING that the Committee on Fiscal Affairs meeting in its BEPS format, i.e. OECD Members as well as Argentina, Brazil, the People’s Republic of China, Colombia, India, Indonesia, Latvia, the Russian Federation, Saudi Arabia and South Africa participating on an equal footing, approved on 21 September 2015 the 2015 BEPS package (the 2015 BEPS Reports and the 2015 BEPS Explanatory Statement) and that these countries have committed to the comprehensive BEPS package and to its consistent application (BEPS Explanatory Statement, paragraph 11);

CONSIDERING that the Council endorsed on 1 October 2015 the BEPS Explanatory Statement and the measures set out in the 2015 BEPS Reports [C(2015)125/REV1] and that the G20 Leaders endorsed the 2015 BEPS Package at the Antalya Summit on 15-16 November 2015;

MINDFUL that, as identified by the Base Erosion and Profit Shifting (BEPS) Action Plan, the existing international standards for transfer pricing rules can be misapplied so that they result in outcomes in which the allocation of profits is not aligned with the economic activity that produced the profits;

CONSIDERING that the 2015 BEPS Report on Actions 8-10 “Aligning Transfer Pricing Outcomes With Value Creation” (hereafter the “Actions 8-10 Report”) has targeted this issue to ensure that transfer pricing outcomes are aligned with value creation [C(2015)125/ADD8];

CONSIDERING that the 2015 BEPS Report on Action 13 “Transfer Pricing Documentation and Country-by-Country Reporting” (hereafter the “Action 13 Report”) has developed a three-tiered standardised approach to transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business [C(2015)125/ADD11];

On the proposal of the Committee on Fiscal Affairs in its BEPS format:

I.          RECOMMENDS that Members and non-Members having adhered to this Recommendation (hereafter the “Adherents”) follow the guidance set out in the Actions 8-10 Report and the Action 13 Report.

II.         INVITES Adherents and the Secretary-General to disseminate this Recommendation;

III.        INVITES non-Adherents to take due account of and adhere to the present Recommendation.