International organisations
International organisations are important participants in the system of international relations. They constitute an institutionalised form of cooperation between states (international governmental organisations, IGOs) or between institutions, legal persons and natural persons from different countries (international non-governmental organisations, INGOs).
International governmental organisations (IGOs) International governmental organisations are organised associations of at least three states established under international agreements. They are set up to pursue the objectives laid down in their founding documents, customarily in a statute. Intergovernmental organisations are characterised by international legal personality, which means that they may hold and incur rights and obligations under international law in their own name. This is expressed above all in their ability to conclude international agreements, maintain diplomatic relations and take part in international conferences.
Functions of intergovernmental organisations In practice, three types of function of intergovernmental organisations are distinguished in the field of international relations:
- regulatory functions, consisting in setting legal, moral and political standards that influence the conduct of the participants in the system of international relations,
- monitoring functions, consisting in examining whether the actions of the member states comply with the standards and models adopted,
- operational functions, consisting in the provision of services to member states or to other entities directly by the international organisation (for example conducting research or preparing reports).
Distinguishing feature The attribute that characterises intergovernmental organisations is the existence of permanent bodies. These are usually:
- a general assembly in which all members of the organisation are represented,
- a council with a smaller number of members rotating in turn and vested with executive powers,
- a bureau or secretariat in permanent session, performing administrative and technical functions.
Classification of international governmental organisations (IGOs) International governmental organisations are classified according to a geographical criterion and according to the nature of the organisation's remit.
Classification on a geographical basis:
- universal organisations, open to membership by all the states of the world (for example the UN),
- regional organisations bringing together states according to their geographical location (for example the African Tax Administration Forum "ATAF", the Pacific Association of Tax Administrators "PATA", the Inter-American Center of Tax Administrations "CIAT").
Classification according to the nature of the organisation's remit:
- general (for example the OECD),
- specialised in a particular area of social life (for example the EU Joint Transfer Pricing Forum ).
International non-governmental organisations (INGOs) International non-governmental organisations are of a different nature. The activity of structures of this kind is not governed by international law but by the law of the state in which the organisation has been registered. Such organisations do not have international legal personality.
Among international non-governmental organisations, one of the largest groups consists of those pursuing humanitarian and pacifist aims and those of a cultural nature. INGOs have considerable influence on their environment, both as participants in social dialogue and as lobbying groups acting on behalf of the cause they support.
OECD
The Organisation for Economic Co-operation and Development was established in 1960 by 20 countries: 18 participants in the Marshall Plan plus Canada and the United States. Poland became a member of the OECD in 1996. The OECD currently has 38 member states. The organisation's aim is to support its member states in achieving the highest possible level of economic growth and standard of living for their citizens. The OECD is the leading international organisation dealing with transfer pricing. Its influence on the conduct of states extends to some 100 countries in total, which apply its guidelines in their domestic legislation.
A number of agreements and codes of conduct concerning commerce and taxation have been developed within the OECD. In 1979 the OECD published its first document devoted to transfer pricing, Transfer Pricing and Multinational Enterprises, which may be regarded as the first set of international guidelines setting out the principles for settlements between related parties.
One of the most important projects conducted by the OECD in the field of transfer pricing was the action plan against base erosion and profit shifting, known as BEPS.
The OECD Guidelines have over time become a point of reference for the tax administrations not only of OECD member countries but also of other states. The OECD's work on transfer pricing continues. Alongside the OECD Guidelines, last updated in 2017, detailed reports are issued, such as the transfer pricing guidance on the implications of the Covid-19 pandemic and the transfer pricing guidance on financial transactions.
The OECD documents and the BEPS reports are available on the OECD website
UN
The United Nations, founded after the Second World War, is above all a political organisation whose aims are to secure international peace and security, to develop cooperation between nations and to promote respect for human rights. Transfer pricing has nonetheless been taken up within the broad programme of the UN and its individual agencies. The result is the Practical Manual on Transfer Pricing for Developing Countries, first published in 2013 and followed by two further editions by 2021. Unlike the OECD, which has developed guidelines for transfer pricing, the UN document is a practical elaboration of the OECD principles aimed at developing countries and an elaboration of Article 9 of the UN Model Double Taxation Convention, which concerns associated enterprises. The UN document also contains an overview of transfer pricing systems in selected countries.
The UN documents are available on the organisation's website, http://www.un.org
BEPS
BEPS, the action plan against base erosion and profit shifting, is a project launched in 2012 by the leaders of the G20, the world's largest economies. The project was run by the OECD and rested on three pillars:
1) introducing coherence among the rules of individual states on cross-border activity 2) strengthening the substantive requirements in the existing international standards 3) improving transparency while at the same time promoting greater certainty and predictability.
The BEPS initiative ran until 2015 and comprised 15 actions to be taken by individual states in order to prevent the unfair avoidance of taxation and the shifting of profits to tax havens. BEPS Actions 8 to 10 and Action 13 are devoted specifically to transfer pricing. One of the results of the BEPS work is country-by-country reporting, introduced by the administrations of the OECD and G20 member states. The CbC report is a document in which international groups report the scale of their activity, their revenue, profits and tax, and the places in which they conduct business. Large taxpayers have been filing such a report in Poland since 2016.
The BEPS reports are available on the OECD website
EU Joint Transfer Pricing Forum
This body, which operates within the institutions of the EU, has produced a Code of Conduct on transfer pricing documentation for associated enterprises. The document concerns the creation of standardised and partly centralised transfer pricing documentation for associated enterprises in the European Union. It was adopted by a Resolution of the Council of the EU and of the representatives of the Member States in June 2006.
Other important documents produced by this body include those on low value adding intra-group services, on advance pricing agreements and on avoiding disputes in the European Union.
The documents of the EU Joint Transfer Pricing Forum are available on the organisation's website