The Definition and Application of the Separate-Entity Approach in the OECD Transfer-Pricing Guidelines

Key Points

• The separate-entity approach clarifies valuation methods for intercompany transactions, ensuring compliance with OECD guidelines.
• Evidence shows that the implementation of this approach can lead to more accurate pricing between entities, improving financial transparency.
• Analysis of current practices reveals the significance of the separate-entity approach for multinational corporations in tax compliance.
• Highlights the need for consistent application of OECD guidelines, as variations may lead to disputes or audits.