The Organization for Economic Cooperation and Development (OECD) has recently updated the Transfer Pricing profiles of 11 jurisdictions, including Azerbaijan and Pakistan, for the first time. These updates incorporate detailed information on treating hard-to-value intangibles (HTVIs) and applying simplified rules for low-risk distribution and marketing activities, known as “Amount B” within the framework of Pillars One and Two to address tax challenges arising from the digitalization of the economy.
What Are Hard-to-Value Intangibles (HTVIs)?
HTVIs are intangible assets whose value is uncertain at the moment of the transaction, such as patents in development or emerging technologies. The OECD has provided specific guidelines to address these cases, allowing tax administrations to adjust transfer prices if there are significant discrepancies between initial projections and actual results.
Implementation of “Amount B”: Simplification in Distribution
The “Amount B” initiative seeks to standardize the remuneration of low-risk distribution and marketing activities, facilitating the application of the Arm’s Length Principle and reducing the administrative burden on companies. This simplified approach is particularly relevant for developing countries, as it promotes greater consistency and predictability in international taxation.
Implications for Peru
Although Peru is not among the jurisdictions updated in this round, multinational companies and Peruvian tax authorities must be aware of these guidelines, given their potential effects on local Transfer Pricing policies and practices. Adopting these recommendations could improve transparency and reduce double taxation risks.
Next Steps
The OECD will continue to update Transfer Pricing profiles throughout 2025, incorporating more countries and details on these guidelines. Peruvian companies must be prepared for possible regulatory amendments and consider revising their Transfer Pricing policies to be in line with the new international recommendations.
Need for Specialized Transfer Pricing Advice?
At TPC Group, we have an expert team at your disposal to help you navigate the complexities of the new OECD guidelines and ensure compliance with current regulations. Contact us for a customized consultation and keep your company aligned with international best practices.
Source: OCDE