Sittings · Document
SPECIAL LEGISLATIVE procedure
Follow up to the European Parliament legislative resolution on the proposal for a Council directive on transfer pricing
1. Rapporteur: Kira Marie PETER-HANSEN (Greens/EFA / DK)
2. Reference numbers: 2023/0322 (CNS) / A9-0066/2024 / P9_TA(2024)219
3. Date of adoption of the resolution: 10 April 2024
4. Legal basis: Article 115 of the Treaty on the Functioning of the European Union
5. Competent Parliamentary Committee: Committee on Economic and Monetary Affairs (ECON)
6. Commission's position: takes note of the amendments proposed by the European Parliament, while reserving its detailed position on these while the discussion in the Council is ongoing.
Notwithstanding this, the Commission welcomes the ambitious European Parliament opinion and underlines that it can agree with the spirit of most of the amendments, as these are in line with the objectives of the proposal or already under discussion in Council and reflect the underlying principles of the proposed policy choices. The Commission wishes to note, in particular, the following amendments:
AM 12, which proposes to add to recital 14 that Member States should empower their tax administrations to deal efficiently with the common documentation efforts on transfer pricing. This amendment would improve the effectiveness of the common approach on transfer pricing documentation which is foreseen under Article 13 of the proposal. Therefore, the Commission could accept this amendment if the Council aligns with this position.
AM 20, on including additional wording in Article 1 to clarify that the objective of the proposal is to simplify compliance for companies ‘whilst ensuring enforcement of tax rules within the Union’. The Commission agrees that one of the objectives of the proposal is to simplify compliance for companies. As regards the second part of the amendment made by the Parliament, the Commission interprets it in the sense that, by making the arm’s length principle and further rules legally binding, a common application can be enforced and disputes on double taxation as well as cases of double non-taxation between Member States brought down, thus further improving the correct application of the transfer pricing rules by taxpayers. Therefore, provided that it is interpreted in the way the Commission understands it, the Commission could accept this amendment, if the Council aligns with this position.
AM 21, which suggests extending the definition of the arm's length principle by including an explicit reference to Article 9 of the OECD Model Tax Convention. While the Commission does not favour the inclusion of a reference to a specific article of the OECD Model Tax Convention for reasons of legal certainty, it could agree with the inclusion of the wording of such article in its proposal to further underline its intention not to deviate from the OECD transfer pricing framework. This solution could be further explored in the frame of the Council negotiations. Therefore, subject to what has been explained above, the Commission could accept this amendment, if the Council aligns with this position.
AMs17 and 47, which suggests introducing in the legal text an article that would require the Commission to review the application of the Directive for Multinational Enterprises (MNE) groups that fall under the scope of the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT). The Commission could, when carrying out the evaluation of the Directive on transfer pricing, consider the impact it has on other EU Directives which are in force. It should be recalled that the transfer pricing rules will remain relevant for all transactions between a BEFIT group member and its associated enterprises which are not part of the BEFIT group and for intra-BEFIT group transactions during the transitional period. Therefore, the Commission could accept these amendments if the Council aligns with this position.