EC Proposes Harmonized TP Rules And 'Fast-track' Procedure

On 12 September 2023, the European Commission released a legislative proposal for a Council Directive that integrates key TP principles into EU law, as part of the BEFIT package.

Based on the proposal all Member States must apply the at arm's length principle for corporate income tax purposes in accordance with the OECD TP Guidelines and are bound to specific provisions in respect of corresponding or compensating adjustments including a "fast-track" procedure to resolve double taxation. It also includes the obligation to apply the most appropriate TP method and the burden of proof in relation to the application of other methods seems stricter than the selection process and burden of proof in relation hereto laid down in the OECD TP Guidelines and in many Members States.