On June 21, 2018 the OECD released Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles (BEPS Action 8). The guidance contained in the report aims at reaching a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of the Hard-to-Value Intangibles (HVTI) approach. The guidance should improve consistency and reduce the risk of economic double taxation.

In particular, the new guidance:

·       Presents the principles that should underlie the application of the HTVI approach by tax administrations;

·       Provides a number of examples clarifying the application of the HTVI approach in different scenarios; and

·       Addresses the interaction between the HTVI approach and the access to the mutual agreement procedure under the applicable tax treaty.

The guidance for tax administration on the application of the HTVI approach contained in this document has been incorporated into the Transfer Pricing Guidelines as an annex to Chapter VI.

Click here to be forwarded to the Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles as released on June 21, 2018 by the OECD.

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