OECD Urged to Issue Clearer Guidance on Stock-Based Compensation

More clarity is needed in how companies can evaluate employees’ stock-based compensation under proposed revisions to the OECD’s transfer pricing guidelines, according to tax professionals. .

Some local tax administrations have denied companies deductions for that stock-based compensation, according to the Business and Industry Advisory Committee to the OECD. Authorities shouldn’t require that stock-based compensation be included in the cost base — the basic accounting of expenses — but then not allow a deduction, BIAC said. “Without a recharge arrangement in place, SBC does not represent an actual cash expense by the service-provider entity in the same manner as salaries and bonuses,” the group wrote. 

Read Bloomberg's article here: https://news.bloombergtax.com/daily-tax-report/oecd-urged-to-issue-clearer-guidance-on-stock-based-compensation.