Submission on 'Revision of Chapter VII of the Transfer Pricing Guidelines on Special Considerations for Intra-Group Services'

The BEPS Monitoring Group has produced comments to the OECD’s public consultation on the “Revision of Chapter VII of the Transfer Pricing Guidelines on Special Considerations for Intra-Group Services”.

In this submission, we reiterate what we had already highlighted in previous submissions on the fundamental inconsistency of attempting to apportion costs while continuing to attribute profits through transactional methods—a disparity that risks enabling further base erosion and profit shifting. We also emphasize that the continued reliance on "accurate delineation" through functional analysis remains inherently subjective and fact-intensive, placing overwhelming burdens on resource-constrained tax authorities while generating increased disputes. On more specific comments, our submission points out, among others, to specific concerns with the proposed revisions, including unnecessary additions like the "expected benefit" concept that could invite abuse, insufficient safeguards against duplicative services, and the problematic retention of the 5% markup for low value-added services—which we have long argued should be eliminated entirely.