The goal of the Instruction is to place the principles of transfer pricing defined by the OECD Directive in the context of the unique and specific situation into which companies have been placed as a result of the COVID-19 pandemic. Thus, the Instruction does not create new rules in times of pandemic that companies should abide by above and beyond the principles defined by the OECD Directive.
The Instruction provides commentary for the practical application of the principles defined by the OECD Directive in relation to the pandemic in the high priority issues specified below:
- Preparation of benchmark analyses;
- Allocation of losses and extraordinary expenses incurred as a result of the pandemic;
- The existence of government aid programmes and their consideration; and
- Binding agreements (“APA”).
Furthermore, the Instruction explicitly states that companies should thoroughly review and document that the chosen approach to resolve and take into account the effects of the pandemic correspond to the approach that an independent subject would choose under the same or similar conditions.
If you have any questions concerning the issue of transfer pricing (not only in the current context), please do not hesitate to contact our specialists with many years of experience in this area, who will be happy to help you.