Transfer Pricing Forum – Transfer Pricing For The International Practitioner

Note from the Authors

When planning to outsource the production of a product, companies always aim to employ the best approach to meet their needs and demands. Contract manufacturing, both inside and outside the group, is a popular business model in the manufacturing sector often employed by multinational enterprises (MNEs) across the board in today's economy.

In this article, we will try to respond to the questions posed to provide the readers with insight on how the business model of contract manufacturing is treated by the Luxembourg Tax Administration (LTA). However, to be able to respond to the questions, we deem it appropriate to first provide a general background on contract and toll manufacturing.