Unlike some of the other B.E.P.S Action Items, Action Item 8 has a basis in existing O.E.C.D. rules. In this regard, the O.E.C.D. Transfer Pricing Guidelines41 have established the operating rules for transfer pricing. It is understandable that Action Item 8 merely presents a series of amendments to Chapters I, II, and VI of the O.E.C.D. Guidelines.
Action Item 8 states that it seeks to:
- Clarify the definition of I.P.,
- Provide guidance on identifying transactions involving I.P., and
- Provide supplemental guidance for determining arm’s length conditions for transactions involving I.P.
Action Item 8 also considers the treatment of local market features and corporate synergies.