Transfer Pricing in the EU: Addressing Tax Certainty and Dispute Resolution
This presentation delves into the challenges surrounding transfer pricing in the EU, focusing on simplifying tax rules, increasing tax certainty, and resolving disputes. It debates the need for a Directive to enforce the Arm's Length Principle (ALP) and Transfer Pricing Guidelines (TPG) and discusses the potential negative consequences of existing dual systems and differing interpretations. The key question is whether a Directive can effectively achieve the goals of streamlining tax regulations and enhancing tax certainty for businesses in the EU. The presentation also suggests potential next steps for consideration, such as implementing a Directive on transfer pricing or identifying issues through the Joint Transfer Pricing Forum (JTPF) for resolution.
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Presentation Transcript
Transfer Pricing in the EU EESC Public hearing 25 January 2024 Ingela Willfors Ministry of Finance 1
What is the problem? Aim to simplifying tax rules through increasing tax certainty Is the main problem really different interpretations of the ALP or are there other problems? Disputes often around facts and circumstances in the specific case Administrative issues Dispute resolution Ministry of Finance 2
What is the added value? Do we need a Directive to apply the ALP and the TPG? The ALP in Article 9 in tax treaties Most EU MS have tax treaties with each other Already apply the TPG in case of a dispute (MAP) The Directive on dispute resolution Ministry of Finance 3
Negative Consequences Dual systems with different interpretations Problems in relation to third countries Impossible to have a common EU position at the OECD ECJ as an expert body Ministry of Finance 4
Do we achieve the goals by a Directive? Simplifying tax rules and increase tax certainty for businesses in the EU Not identified the main problems Article 9 and TPG already applied Important negative consequences Ministry of Finance 5
Next steps Directive on transfer pricing OR Identifying problems JTPF or similar forum Dispute resolution Ministry of Finance 6
