On 16 December 2020 the OECD published information setting out the extent to which member countries of the Inclusive Framework have implemented the recommendations on hard to value intangibles (HTVI) drawn up as part of the OECD/G20 project on base erosion and profit shifting (BEPS).

Hard-to-value intangibles (HTVI) are defined as intangibles or rights in intangibles for which there are no sufficiently reliable comparables at the time of their transfer, and where there is no reliable projection of future cash flows or income from the transferred intangible, or where the assumptions used in the valuation of the intangible are uncertain.

The approach to pricing HTVI outlined by the OECD gives tax administrations the possibility to look at ex post outcomes and treat them as presumptive evidence of the appropriateness of ex-ante pricing arrangements.

The taxpayer would be given a chance to put forward arguments to show the reliability of the information given in support of the transfer pricing methodology adopted at the time of the controlled transaction.

An annex to Chapter VI of the OECD transfer pricing guidelines added in 2018 gives guidance to tax administrations on application of transfer pricing adjustments resulting from the use of the HTVI approach.

Information on implementation of the provisions in domestic tax law was provided to the OECD by 40 countries. The information is published as part of the monitoring process agreed by the Inclusive Framework. The jurisdictions participating in the monitoring of HTVI implementation have provided reports on relevant legislation and administrative practices.

The publication of the information can provide tax administrations and taxpayers with greater insight into the extent to which the HTVI approach has been adopted and applied in practice by countries around the world, with the aim of reducing misunderstandings and disputes between governments.