Proposal for a Directive on transfer pricing - a BusinessEurope position paper

Key messages

• We support the Commission’s objectives of increasing tax certainty and mitigating the risks of litigation and double taxation related to transfer pricing arrangements.
• The proposed incorporation of the arm’s length principle and key transfer pricing rules into the EU’s legal framework risks increasing tax and legal uncertainty. The Commission should prioritise the harmonisation and strengthening of certain procedural and governance aspects of transfer pricing.
• This needs to be supported by a more robust and efficient dispute resolution framework in the EU, including the streamlining of transfer pricing documentation requirements, promoting more use of Advanced Pricing Agreements, strengthening the Mutual Agreement Procedure in the Arbitration Convention, expanding the European Trust and Cooperation Approach (ETACA) initiative, and reinstituting the EU Joint Transfer Pricing Forum.