As part of the ongoing work of a partnership on base erosion and profit shifting (BEPS) in the mining programme, the OECD and Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) are seeking public comments on two toolkits. The first toolkit provides a framework that is designed to support developing countries in addressing the transfer pricing challenges faced when pricing minerals. The second toolkit applies this transfer pricing framework to a specific mineral (bauxite).

These toolkits are for policy-makers and tax administrations in resource-rich developing countries where mining activity is being undertaken by multinational enterprises (MNE’s). Mining provides a significant contribution to the economies of many developing countries; however, achieving an arm’s length price for the sale of the host state’s mineral products can be challenging. The cross-border sale and purchase of mineral products between related parties poses a significant BEPS risk through MNEs selling mineral products to related entities abroad at prices below arm’s length, thereby shifting sales revenue and profits offshore—generally to a low tax jurisdiction.

The toolkits provide practical and meaningful guidance for developing countries to accurately delineate the transaction and price mineral sales on an arm’s length basis. The OECD and IGF are seeking comments regarding the application and usability of the toolkits to ensure that they are fit for purpose and appropriately tailored to the needs and requirements of developing countries.

Interested parties are invited to send their comments separately on each of these documents no later than 14 July 2023 by e-mail to [email protected] in Word format (in order to facilitate their distribution to government officials). All comments should be addressed to the Global Relations and Development Division, OECD Centre for Tax Policy and Administration.

Further information available here.

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