The Tax Programme of the OECD Korea Policy Centre has held the 103^rd tax seminar regarding ‘Comparability Analysis in Transfer Pricing, with focus on the Mining Industry’ from September 18^th  to 23^rd in Seoul and Pohang.

For this seminar, two experts from the OECD have joined the event to provide lectures and discuss matters related to tax issues in mining industry. Also, around 20 participants from Asia Pacific countries such as China, Vietnam, and Thailand have come to the seminar and actively involved in the event by sharing their experiences, policies and technical tools in transfer pricing issues in mining industry. 

The seminar has mainly considered about how to improve understanding of the mines operating in the borders and how countries can go for verifying the prices of mineral products are sold to related parties.

Also, this workshop has examined several case studies on main mineral such as old, copper, iron ore, thermal coal and rough diamonds – and provided participants with discussion about how to get clear understanding of mining sectors through a combination of better information and potential avenues to resolving information gaps.

The topics covered include:

ㅁ  Issues Arising when Conducting a Comparability Analysis, including:

  o   Delineating the transaction between related parties

  o   Data for comparability analyses and making optimal use of available data

  o   Determination of and making comparability adjustments where appropriate

  o   Interpretation and use of data collected, determination of the arm’s length remuneration

ㅁ Approaches to Applying Internationally Accepted Principles in the Absence of Comparables

ㅁ Understanding the mining industry and how minerals are priced, including case studies into iron ore; copper; gold; thermal coal; and rough diamonds 

After the seminar, participants have visited POSCO steel located in Pohang for the field trip to get better understanding of the issues by observing the steel making process and use of mineral products.