Chamber supports the European Commission’s plan to set uniform rules on transfer pricing

The European Commission has drawn up a proposal for a Directive which seeks to establish common rules and standards for the assessment and determination of transfer pricing in cross-border transactions between affiliates in order to avoid double taxation of undertakings. The Chamber strongly supports the proposal for the Directive.

Current EU law does not have uniform standards or rules on transfer pricing and is regulated by each Member State in accordance with national law. The aim of the proposal for the Directive is to improve the situation by harmonising transfer pricing rules in the European Union, reducing the risk of double taxation for businesses and making transfer pricing taxation clearer for cross-border transactions.

The Chamber supports the objective of the proposal for the Directive and agrees that the above proposal will help to achieve these objectives and that regulation of the field by the directive is necessary.

As regards the proposal, we welcomed the fact that the European Commission has based the proposal on the OECD guidelines. At the same time, we pointed out that it should be investigated whether and to what extent the wording of the proposal for the Directive differs from the OECD recommendations and, if the proposal contains stricter rules, whether such differences are necessary and justified.

A transfer price is the price of a transaction between related persons, i.e. the price that one related person charges another related person for a product or service.

Read more about the proposal for the Directive on transfer pricing here.