051e. Transfer Pricing - Where We Stand - European Union Transfer Pricing Arbitratration Convention

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The EU convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises went into effect between the EU member states on 1 January 1995. It is regarded as experimental in nature and remains in force only until 31 December 1999. It is applicable to income taxes accruing during this five year period provided the matter is brought before a competent authority before the convention lapses. The convention is geographically limited to the European territory of the signatory states, which for the time being do not include Austria, Finland, and Sweden. It may be invoked only by enterprises of a treaty state and their permanent establishments by application to the competent authority in their state of residence.