The Prescriptive Nature of the OECD Transfer Pricing Guidelines: Drawing the Line between Recommendations and Requirements

This article conducts a systematic examination of the prescriptive nature of the OECD Transfer Pricing Guidelines, examining how their language explicitly or implicitly shapes compliance expectations for multinational enterprises and tax administrations. The text of the OECD Transfer Pricing Guidelines contains numerous prescriptive expressions that, in practice, function as de facto obligations from delineation and recognition of the method selection, application, documentation, and dispute resolution. By analysing the linguistic nuances, it highlights the binding obligations within the Guidelines that govern real-world compliance behaviour and guide both academic understanding and professional practice.