The OECD's 2026 work programme is set to target several of the most contested areas in digital economy transfer pricing. Discussion drafts are anticipated covering cloud services and data centre costs, the benefit test for intra-group services, cost pass-through arrangements, and high-value services. These are not minor clarifications they address structural gaps in the current TP guidelines that digital-native MNEs have exploited for over a decade.

Cloud Services: The Definitional Challenge

The transfer pricing treatment of cloud services sits in a genuinely contested space. When a parent entity provides cloud infrastructure to subsidiaries, is the charge best analysed as a technology service, a licence of software, or a rental of tangible property? The answer determines which TP method applies and which comparable data is relevant. Current OECD guidance, written before cloud computing matured, provides insufficient clarity and the upcoming discussion draft is expected to establish a classification framework that distinguishes IaaS, PaaS, and SaaS arrangements for TP purposes.

Data centre costs particularly where MNE groups have centralised AI computing infrastructure are emerging as a new frontier. The allocation of GPU cluster costs, cooling infrastructure, and bandwidth expenses between related parties is an area of growing controversy, with several large tech companies already under audit in multiple jurisdictions.

The Benefit Test under Scrutiny

The benefit test the requirement that an intra-group service charge must provide a genuine economic benefit to the recipient to be deductible is increasingly the subject of tax authority challenge. In the current environment, where MNEs frequently charge subsidiaries for centralised AI development costs, market intelligence platforms, and group-wide data lakes, tax authorities are questioning whether local entities truly benefit from these shared investments or whether charges are merely fee-skimming mechanisms to shift profits to IP jurisdictions.

What MNEs Should Do to Prepare

Companies with significant digital service flows between related parties should conduct a pre-emptive review of their benefit test documentation for intra-group technology and data charges. Cost-sharing arrangements covering AI model training and deployment should be scrutinised against the existing OECD guidance on cost contribution arrangements and the anticipated new discussion drafts. Engaging with the consultation process expected to open to public comment in mid-2026 provides an opportunity to influence standards before they are finalised.