ARTICLE · 04 JANUARY 2024

EU Corner

ELVINGER HOSS PRUSSEN, société anonyme

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On 12 September 2023, the European Commission introduced the Transfer Pricing Directive proposal ("TP Proposal").

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Elvinger Hoss Prussen

1. Legislation

Transfer Pricing Directive proposal: a potential EU harmonised framework for transfer pricing?

On 12 September 2023, the European Commission introduced the Transfer Pricing Directive proposal ("TP Proposal"). It aims at creating within the European Union a harmonised legal framework for transfer pricing ("TP") and ensuring a consistent application of the arm's length principle among the Member States.

The TP Proposal essentially seeks to integrate the arm's length principle and, more generally, the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ("OECD Guidelines") into the legislation of all Member States. As such, the latest version of the OECD Guidelines would be binding for all Member States, regardless of the TP rules that may be already implemented in the local law prior to the TP Proposal.

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