Need to revisit the arm’s length range in the proposal for EU Directive on transfer pricing Federico Lo Bianco
By: Lo Bianco, Federico
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Material type: 
ArticleSubject(s): PRECIOS DE TRANSFERENCIA | LEGISLACION COMUNITARIA | DIRECTRICES | ORGANIZACION DE COOPERACION Y DESARROLLO ECONOMICO | PRINCIPIO DE PLENA COMPETENCIA | LEGISLACION
In:
Intertax v. 53, n.3, March 2025, p. 284-292Summary: The article investigates a specific aspect of the proposal for an EU directive on transfer pricing: the arm’s length range. The matter is addressed in Article 12 of the proposal which states that only the interquartile range of values resulting from the benchmark can be considered as being at arm’s length. This provision is in contrast with the indication of the OECD Guidelines and the national transfer pricing provisions of various EU Member States applying the OECD Guidelines, among which are Germany, Italy, the Netherlands, Slovenia, and Spain. Both the guidelines and the national rules establish that, when the level of comparability of the benchmarked observations is high, the full range of results can be considered as being at AL. The full range approach is often implemented in the financial transfer pricing practice, and the article highlights the evident mismatch between the proposal and the current transfer pricing reality. In the final section, the author proposes an amendment to address such a lack of correspondence between the proposal and the current OECD framework that is likely to create uncertainty for taxpayers if Article 12 is not readjusted before the proposal’s approval.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 2141/2025/3-5 (Browse shelf) | Available | OP 2141/2025/3-5 |
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The article investigates a specific aspect of the proposal for an EU directive on transfer pricing: the arm’s length range. The matter is addressed in Article 12 of the proposal which states that only the interquartile range of values resulting from the benchmark can be considered as being at arm’s length. This provision is in contrast with the indication of the OECD Guidelines and the national transfer pricing provisions of various EU Member States applying the OECD Guidelines, among which are Germany, Italy, the Netherlands, Slovenia, and Spain. Both the guidelines and the national rules establish that, when the level of comparability of the benchmarked observations is high, the full range of results can be considered as being at AL. The full range approach is often implemented in the financial transfer pricing practice, and the article highlights the evident mismatch between the proposal and the current transfer pricing reality. In the final section, the author proposes an amendment to address such a lack of correspondence between the proposal and the current OECD framework that is likely to create uncertainty for taxpayers if Article 12 is not readjusted before the proposal’s approval.
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