Modern approaches and recommendations of the OECD to transfer pricing in mineral supply chains

The authors have examined contemporary transfer pricing initiatives within mineral supply chains as developed by the OECD, in the context of its implementing into national tax laws to tackle tax evasion and ensure fairness in taxation for transactions between related parties. The importance of integrating the OECD document titled “Determining the Price of Minerals: A Transfer Pricing Framework,” which was released in November 2023, is strongly emphasized. This pivotal document delineates practical recommendations that are specifically designed for developing countries, guiding them on how to accurately set transaction and sale prices of minerals under prevailing market conditions. To substantiate this study, the authors provide a comprehensive overview of the economic factors and risks associated with mineral pricing. Key economic factors influencing mineral prices and transaction dynamics include the intrinsic physical attributes of the minerals, such as their purity and rarity; commercial considerations like market competition and product differentiation; financial aspects including currency fluctuations and interest rates; global and regional supply and demand trends that reflect geopolitical issues; reliability of supply chains; and a verified historical track record of mineral extraction which assures buyers of consistent quality. Additionally, the authors have explored recent trends within Ukraine’s mining sector, suggesting that, given the current circumstances, these could act as a springboard for restoring and modernizing domestic mining operations while producing high-value-added mineral products.