Transfer Pricing Documentation In Luxembourg – What's Your Strategy?

Transfer pricing has become the hot topic in Luxembourg taxation over the last few years in an environment that relies increasingly less on tax rulings. In the past, businesses viewed tax rulings as a way to provide certainty and avoid risks when structuring investments or intra-group transactions. However, for a number of reasons this is no longer the case.

This means that multinationals and international investors need to develop a solid strategy for transfer pricing and related documentation. In this blog, I would like to suggest some best practice recommendations which should help businesses define a reasonable approach towards transfer pricing.

In general, taxpayers are under a duty to co-operate with the Luxembourg tax authorities and to evidence facts and provide information in regard to statements made in the tax returns. In 2015, the taxpayer' s duty of co-operation was extended to transactions between associated enterprises, although no specific transfer