EU Commission’s Proposed Transfer Pricing Directive Impacts MNEs

The proposed EU Transfer Pricing Directive should be closely monitored by MNEs doing business within the European Union. The Directive aims to target transactions between EU-based associated enterprises, but transactions between an EU-based associated enterprise and its foreign associated enterprises may also be affected.

Historically, the European Commission did not allocate significant time and resources to transfer pricing. It did, however, put in place a European Union Joint Transfer Pricing Forum (EUJTPF) in 2002 that lasted until 2019 and monitored the functioning of the multilateral Arbitration Convention, which only applies to EU Member States and explicitly covers transfer pricing. The ...