Jeffery M. Kadet, Tommaso Faccio, and Sol Picciotto, Profit-Split Method: Time for Countries to Apply a Standardized Approach, 91 Tax Notes Int'l 359 (2018), https://digitalcommons.law.uw.edu/faculty-articles/496
Tax Notes International
Now that the OECD has issued its final guidance on the action 10 profit-split method, individual countries must determine how they might consider and apply the profit-split method.
It’s true that some countries have large and well-staffed transfer pricing audit groups that include economists and other tax professionals knowledgeable in the application of transfer pricing principles and rules. However, those resources are never enough to match the legions of specialists that can be deployed by large multinational groups.
The situation is even worse elsewhere. Most countries not only have significant resource and personnel constraints, but they also simply do not have the internal expertise to effectively apply transfer pricing rules to the multiple industries in which multinational groups operate. For those countries, applying the complex and subjective transfer pricing rules, including analyzing and understanding accurately delineated controlled transactions as contemplated by the OECD transfer pricing guidelines, is simply not an option.