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Patricia G. Lewis Quoted in Bloomberg BNA Daily Tax Report, OECD Working Group to Issue Draft On Standard Approach to Safe Harbors

June 5, 2012, Bloomberg BNA Daily Tax Report
Excerpt taken from the article.

The Organization for Economic Cooperation and Development Working Party No. 6 is about to publish a discussion draft of a paper on safe harbors that will rewrite Chapter 4, Section E of OECD's transfer pricing guidelines, Joseph Andrus, head of the Transfer Pricing Unit with the OECD, announced June 4.

Speaking at the 2012 OECD International Tax Conference in Washington, D.C., Andrus announced that the white paper also would provide a proposed annex to the guidelines that would include three draft memorandum of understanding agreements. Tax administrators could use the agreements to develop bilateral, negotiated safe harbors that would apply to "more straightforward types of transfer pricing cases."

These draft agreements would relate to common situations, he said--one on low-risk distribution, one on low-risk manufacturing, and one on low-risk research and development activities.

Andrus's announcement met with enthusiasm from other members of the panel. Patricia Lewis of Caplin & Drysdale Chartered in Washington, D.C., said "I am really glad to see the OECD apparently relaxing its fairly harsh position on safe harbors that was reflected in the 1995 transfer pricing guidelines." While there are pros and cons to safe harbors, she said, "at this point it must be concluded that the pros outweigh the cons."

"The realities dictate that this kind of approach be encouraged, and it seems like it will be," she said.

Click here to read the complete article regarding the OECD's issuance of a draft on standard approach to safe harbors.

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