Transfer Pricing

Transfer Pricing

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  • Hans W. Waldvogel
    Hans W. Waldvogel    Premium Member   Group moderator
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    What’s going on at the EU Joint Transfer Pricing Forum (EU JTPF)?
    EU JTPF

    For those not knowing yet the existence and work of the EU JTPF, let me first do a small introduction.
    The EU JTPF is made of the experts of the tax administrations of the 27 member states and of 15 eminent persons in the field of transfer pricing from the private sector with experience and competence chosen by the European Commission assisted by the EU Council Presidency and the BusinessEurope Fiscal Affairs Committee, from appropriately qualified applicants, active in industry, services, the business community or in fields of activity linked with transfer pricing.

    Its mission is to be an expert group to advise the European Commission on transfer pricing tax issues and to produce pragmatic, non-legislative solutions within the framework of the OECD Transfer Pricing Guidelines to the practical problems posed by transfer pricing practices in the EU.

    So far the EU JTPF was instrumental in 3 EU Commission documents which were submitted to and agreed by the European Council of Ministers:

    1. Code of Conduct for the effective implementation of the "Arbitration Convention
    2. Code of Conduct on transfer pricing documentation for associated enterprises in the EU
    3. Guidelines for Advance Pricing Agreements (APAs) within the EU

    Is Currently Working On
    1. Procedural aspects of multilateral transfer pricing cases under the Arbitration Convention (AC).
    A tax audit adjustment in one country has a repercussion in two or more other countries due to their involvement in the supply chain. So far, the Forum has closed the work on the cases where all the countries involved are members of the EU. A final recommendation to the Commission will be made when the work on the cases where some countries involved are non-EU members is finalized

    2. Centralized Intra-group services.
    The discussion is about the definition and treatment of intra group central services, guidance on "Shareholder Activity", the potential of a lighter touch audit/risk assessment approach to low value add services (also called standard or basic services), how to deal with centralised service contracts (costs allocation), documentation and evidence required and the interaction with the Mutual Agreement Procedure (MAP) /AC. The Forum devoted already various meetings on the issue and it is expected that in 2009 substantial progress will be be made to find practical solutions.

    These are the main topics only. Other issues like the interpretation of some provisions of the Arbitration Convention, financial intercompany relations (e.g. thin capitalization) or the status of the cases under the Arbitration Convention are also under discussion.

    I would be interested to hear and discuss what the experience of the members is regarding the above 5 points. In case of interest, we could have 5 separate discussions sub-groups.


    Guy A. Kersch

    Tax Advisor

    Conseil économique
    • 08 Dec 2008, 10:59 am