The OECD and the G20 provide specific guidance within the Transfer Pricing Guidelines for low value added intra-group services.1 Section D of Section VII within these Guidelines specifically addresses these low-value added intra-group services. The official text of these provisions refer to "value adding" activities rather than to "value added" activities. The authors of this piece use the more commonplace standard, value added. The OECD and G20, as transnational institutions, divide Section D into four parts:
| • | Section D1 contains the OECD and G20 definition of "low value added intra-group services." | |
| • | Section D2 provides for a simplified benefits test. This section sets out a simplified benefits election for the multinational enterprise. The simplified approach determines arm's length charges for low value added intra-group services. | |
| • | Section D3 contains guidance for the OECD and G20's documentation and reporting requirements. The multinational enterprise needs to meet these requirements when electing to apply this simplified transfer pricing approach. | |
| • | Section D4 addresses the levying of withholding taxes and customs issues that apply when the multinational enterprise provides low value added intra-group services. |
