Written by Pieter Baert (1st edition).
The pricing of goods and services that are traded within a multinational group is referred to as ‘transfer pricing’. The prices charged on such transactions affect the division of income between the different entities of the multinational group (and consequently, the taxable profits per country). To ensure that transactions between group entities are priced in a way that reflects their fair market value – i.e. as if the transactions were made between independent entities – countries have put in place strict transfer pricing rules. While these rules are made at national level, EU Member States generally stay close to (non-binding) OECD Guidelines. However, the number of transfer pricing tax disputes has risen over the years, with both tax authorities and companies spending significant time and resources on solving such cases.
On 12 September 2023, the European Commission tabled a proposal on harmonising transfer pricing rules within the EU. The main objective is to establish a common approach at EU level towards transfer pricing and define a number of key transfer pricing principles in order to enshrine them into EU law.
Complete version
March 2024: ‘Harmonising transfer pricing rules within the EU‘ (1st edition)
Proposal for a Council directive on transfer pricing
Committee responsible: Economic and Monetary Affairs (ECON), COM(2023)532 – 12.9.2023
Rapporteur: Kira Marie Peter-Hansen (Greens/EFA, Denmark), 2023/0322 (CNS)
Shadow rapporteurs:
- Anna-Michelle Asimakopoulou (EPP, Greece)
- René Repasi (S&D, Germany)
- Gilles Boyer (Renew, France)
- Andżelika Anna Możdżanowska (ECR, Poland)
- José Gusmão (The Left, Portugal)
Consultation procedure (CNS): Parliament adopts a non-binding opinion
Next steps expected: Vote in plenary on ECON committee report