With the abandonment of the European Directive, it will be more difficult to define the future certainty of transfer prices

Abstract

Fair transfer pricing was destined to become a European constraint with the entry into force of the European Directive presented in 2023. An innovative and prestigious goal that did not stand up to disagreement among the Member States for its final approval. The Directive would have had a future effect on the Member States’ legal systems, far greater than that achieved by the OECD Guidelines. Only a European source could have provided future certainty on the criteria permissible for European tax systems to define the fairness of transfer pricing. A certainty that would have made it possible to overcome the current differences between regulations. However, it would have been destined to weaken in the face of the heterogeneity of the criteria that the Directive itself accepted as admissible and that would have been exacerbated in their application in national systems. For the relative effectiveness of the European methods, a comparison of prices between group companies would have been required, with the determination of prices in the internal market with unencumbered group companies.