Transfer pricing: MEPs want quicker application of new rules 

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On Wednesday, MEPs in plenary adopted their opinion on the proposed directive regulating transfer pricing, proposing a quicker application of the rules.

The adopted amendments to the Commission proposal aim to shorten by one year the entry into force of the directive (2025 instead of 2026), re-establish the EU Joint Transfer Pricing Forum, and align as closely as possible to the latest OECD Transfer Pricing Guidelines, while acknowledging that space could subsequently be made for UN guidelines. Finally, MEPs want the Commission to be empowered to put forward further implementing rules on the matter rather than the Council.

The opinion, spearheaded by Kira Peter-Hansen (Greens/EFA, DK), was adopted by 438 votes to 99 and 63 abstentions.


After the vote the rapporteur, Kira Peter-Hansen (Greens/EFA, DK) said: "We managed to find a broad agreement to make the Transfer Pricing directive more democratic, future-proof and a stronger tool to limit transfer pricing abuses in the EU.

“As rapporteur, it was important to have any future changes to the directive happen through delegated acts and strengthen the role of the Parliament. Also the role of academia, business representatives and civil society will be strengthened through our proposal to re-instate the Joint Transfer Pricing Forum.

“Additionally, our text acknowledges that although the OECD Transfer Pricing guidelines currently hold sway in the EU, there is potential for the emergence of alternative guidelines in the future which could be relevant to the EU, such as those from the UN. Now I urge Member States to follow our pace in coming to an agreement on this important text."

Next steps

Parliament’s opinion now passes to the Council for consideration. After that, it will be up to the member states to adopt the definitive act.


Transfer pricing refers to the pricing of transactions between companies in the same group that operate in different countries.

A significant volume of global trade consists of international transfers of goods and services, capital and intangibles (most importantly intellectual property) within a multi-national enterprise (intragroup transactions). When companies in the same group trade across borders, the prices they set for these transactions affect their income and expenses. This, in turn, influences the profits each company reports for tax purposes in each country where they operate. Therefore, the terms of these cross-border transactions can affect how much tax each company pays in different countries.

Aggressive use of transfer pricing therefore leads to minimizing tax payments and increasing profit shifting.

In the EU, there is currently no single set of rules for this. Instead, each member state has its own rules. Such inconsistency is a serious tax obstacle for businesses operating across borders, leads to profit shifting and tax avoidance, is likely to cause economic distortions and inefficiencies, and has a negative impact on cross-border investment and growth.