Transfer pricing and value creation

Emerging from the OECD/G20 BEPS Project, a new, somewhat fuzzy notion of value creation came to permeate not only transfer pricing language but also wider allocation rules and anti-abuse provisions in international tax law. The notion of "value creation" reframes the interpretation and application of the arm's length principle (ALP) that is embedded in Articles 7 and 9 of the OECD Model Convention. This new value creation notion and approach assist in understanding key enterprise functions while different industry sectors manifest these concepts in various ways. Situating such notions and this approach within the law of tax treaties and analysing terms of the OECD Transfer Pricing Guidelines alongside their factual context is the aim of this book. The book provides four parts: (1) introduction; (2) value creation and the application of the arm's length principle; (3) transfer pricing an global value chains; and (4) transfer pricing and value creation in specific industry sectors.