The hard-to-value-intangibles approach acknowledges the challenges both with preparing projections used for valuations, as well as potential information asymmetry and timing issues between taxpayer and tax authority. Hard-to-Value Intangibles The hard-to-value-intangibles approach was integrated into Annex II to Chapter VI of the OECD Guidelines to provide a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of the hard-to-value-intangibles approach. In particular, the guidance provides examples of when specific profit split allocation keys should be used, based on the delineation of the transaction and objective data, and allows consideration of comparable analyses including valuations and qualitative factors. segregation of financial data and dealing with different accounting standards) as well as offering further practical guidance on its utilization. The adjustments made to Section C of Chapter II (as well as Annexes II and III to Chapter II) focus on delineating the transactions, providing examples of potential challenges to the profit split (i.e. It also acknowledged that tax authorities increasingly take a holistic view rather than a one-sided tested party approach, particularly in the case of unique and valuable intangibles, situations involving highly integrated business activities, and with shared functions, assets, and or risks. The guidance on the transactional profit split method recognized that multinationals often have multiple contributors to value, leading to difficulties with unwinding the allocation of increasingly complex value chains. the Transfer Pricing Guidance on Financial Transactions, adopted by the OECD/G20 Inclusive Framework on BEPS on 20 January 2020. the Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles, approved by the OECD/G20 Inclusive Framework on BEPS on 4 June 2018 and.the Revised Guidance on the Transactional Profit Split Method, approved by the OECD/G20 Inclusive Framework on BEPS on 4 June 2018.The latest guidance includes reference to materials released by the OECD since 2017, namely:
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