Definitive global law guides offering comparative analysis from top-ranked lawyers
CHAMBERS GLOBAL PRACTICE GUIDES
Transfer Pricing 2026 Definitive global law guides offering comparative analysis from top-ranked lawyers
Contributing Editors Paolo Ludovici, Marlinda Gianfrate and Luca Tortorella Gatti Pavesi Bianchi Ludovici
Global Practice Guides
Transfer Pricing Contributing Editors Paolo Ludovici, Marlinda Gianfrate and Luca Tortorella Gatti Pavesi Bianchi Ludovici
2026
Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewers Sally McGonigal, Ethne Withers, Deborah Sinclair, Stephen Dinkeldein, Vivienne Button and Sean Marshall Content Reviewers Lawrence Garrett, Marianne Page, Heather Palomino, Alison Moore, Adrian Ciechacki and Michael Irvine Content Coordination Manager Nancy Tsang Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Joanna Chivers Head of Production Jasper John Production Coordinator Genevieve Sibayan
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Contents
INTRODUCTION Contributed by Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici p.4
NETHERLANDS Law and Practice p.161 Contributed by Borgen Tax
Trends and Developments p.178 Contributed by RED Transfer Pricing
AUSTRIA Law and Practice p.10 Contributed by Grant Thornton Austria Trends and Developments p.23 Contributed by Grant Thornton Austria BRAZIL Law and Practice p.29 Contributed by William Freire Advogados
PERU Law and Practice p.184 Contributed by +Value SOUTH KOREA Law and Practice p.200 Contributed by Lee & Ko
Trends and Developments p.220 Contributed by Yoon & Yang LLC SPAIN Law and Practice p.227 Contributed by Cuatrecasas Trends and Developments p.239 Contributed by Cuatrecasas SWITZERLAND Law and Practice p.247 Contributed by Tax Partner AG Trends and Developments p.267 Contributed by Tax Partner AG
CYPRUS Law and Practice p.50 Contributed by Kinanis LLC Trends and Developments p.61 Contributed by Kinanis LLC EUROPE-WIDE Trends and Developments p.66 Contributed by TPA Global FRANCE Law and Practice p.73 Contributed by &Co Advisory Trends and Developments p.91 Contributed by &Co Advisory
UAE Law and Practice p.273 Contributed by Kinanis Tax Consultancy Middle East Limited Trends and Developments p.284 Contributed by Kinanis Tax Consultancy Middle East Limited
ITALY Law and Practice p.97
Contributed by Maisto e Associati Trends and Developments p.116 Contributed by Gatti Pavesi Bianchi Ludovici
USA Law and Practice p.289
Contributed by White & Case LLP Trends and Developments p.301 Contributed by White & Case LLP
LUXEMBOURG Law and Practice p.123
Contributed by ATOZ Tax Advisers Trends and Developments p.140 Contributed by ATOZ Tax Advisers MEXICO Law and Practice p.144 Contributed by QCG Transfer Pricing
ZAMBIA Law and Practice p.307 Contributed by Mulenga Mundashi Legal Practitioners Trends and Developments p.320 Contributed by Mulenga Mundashi Legal Practitioners
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INTRODUCTION
Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
Gatti Pavesi Bianchi Ludovici is a full-service in - dependent law and tax firm with 200 professionals based in offices in Milan, Rome and London. The firm provides expert guidance and assistance to national and international clients and institutions across all ar - eas of civil, commercial and corporate law, as well as in national and international taxation. Its dedicated team provides comprehensive support to multina - tional groups across all areas of transfer pricing, in - cluding the definition of transfer pricing policies; tax optimisation of supply chain models; cross-border restructurings; negotiation of unilateral, bilateral and multilateral APAs with tax authorities; and drafting
of transfer pricing compliance documentation. The team is involved in complex transfer pricing litigation and joint audits, also offering support in pre-litigation settlement procedures and MAPs. In addition, the firm assists with the International Compliance Assur - ance Programme (ICAP) and advises on international and EU law, such as in the application of bilateral tax treaties. By capitalising on strong professional rela - tionships with top-tier firms worldwide, Gatti Pavesi Bianchi Ludovici is able to support clients effectively across multiple regions and seamlessly co-ordinate multi-jurisdictional teams.
Contributing Editors
Paolo Ludovici has been a partner of Gatti Pavesi Bianchi Ludovici since 2021 following its merger with L&P, a firm he founded in 2014. He was previously a partner at Maisto e Associati. He advises on all areas of
Luca Tortorella has been working at Gatti Pavesi Bianchi Ludovici since 2021. He has more than 15 years’ experience in the transfer pricing and international tax arena. Luca has significant experience advising major
tax law and his expertise includes domestic and international corporate reorganisations, M&A and structured finance transactions, and tax planning for HNW individuals and trusts. He is vice president of the Tax & Legal & Compliance Commission at the Italian Private Banking Association and is a member of the Tax and Legal Commission at the Italian Private Equity, Venture Capital and Private Debt Association (AIFI). He is also admitted to the Italian Chartered Accountants Association.
multinational entities in cross-border business restructurings and the negotiation of APAs, and with the Italian patent box regime. He also assists multinationals with transfer pricing and deemed permanent establishment controversies, and in international procedures aimed at eliminating double taxation. Previously, Luca worked for international tax and law firms and spent two years as transfer pricing manager in the London office of a multinational pharmaceutical. He graduated in business administration and is admitted to the Italian Chartered Accountants Association.
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INTRODUCTION Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
Marlinda Gianfrate has been an of counsel at Gatti Pavesi Bianchi Ludovici since 2022 and is involved in various projects concerning international tax issues. With an economics background, she deals
Angelica Masciulli has been working at Gatti Pavesi Bianchi Ludovici since 2021, focusing on transfer pricing and international taxation. She advises leading multinational groups in the industrial and financial sectors on
with international taxation, with a focus on transfer pricing, APAs, MAPs and co-operative compliance programmes. Marlinda worked for the Italian tax administration for 17 years, most recently holding the position of head of the Advance Agreements Office of the Revenue Agency. She was also assigned to represent Italy at the OECD’s CFA Working Party No 6 (on the taxation of multinational enterprises), contributing to work related to the BEPS Project, the update of the OECD TP Guidelines and the two-pillar solution.
documentation matters, as well as pre-litigation and APA settlement procedures with the tax authorities. Before joining Gatti Pavesi Bianchi Ludovici, Angelica worked at an international tax and law firm as a transfer pricing specialist, assisting financial and industrial clients. She graduated cum laude in economics and business law in 2017 and holds a master’s degree in tax law. She is a member of the Association of Chartered Accountants.
Gatti Pavesi Bianchi Ludovici Piazza Borromeo 8 20123 Milano Italy
Tel: +39 02 859751 Fax: +39 02 809447 Email: studio@gpblex.it Web: www.gpblex.it
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INTRODUCTION Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
Global Overview International organisations and institutions have con - tinued their efforts to standardise, harmonise and sim - plify transfer pricing principles and compliance. These developments have been seen in individual jurisdic - tions around the world, as evidenced by, among other things, the further progress made in addressing harm - ful tax practices and strengthening transparency in line with the BEPS Action 5 minimum standard and the efforts of a number of jurisdictions to update their transfer pricing country profiles (as detailed in the sec - tion below). In general terms, however, interconnected geopolitical tensions (including the tariffs introduced by the US administration and the consequent counter-tariffs enacted by the EU, Canada and China) have impacted the global value chains and the transfer pricing poli - cies, adding uncertainty and the risk of double taxa - tion. The landscape also remains highly uncertain in light of the US Supreme Court’s ruling of 20 February 2026 which invalidated certain tariffs introduced by President Trump. OECD level At the OECD level, the most significant developments in 2025 related to the position adopted by the Unit - ed States with respect to the OECD/G20 two-pillar solution on the taxation of multinational enterprises (MNEs). Following the White House memorandum of 20 Janu - ary 2025, the United States signalled that it did not intend to proceed with the implementation of the OECD “global tax deal”, effectively distancing itself from Pillar Two and the reallocation mechanism of Pillar One Amount A. Given that the multilateral con - vention required for the implementation of Amount A would primarily affect large US-headquartered multi - national groups, the US position raises serious doubts about the practical viability of Pillar One. The position taken by the United States may also have indirect implications for the practical implementation of Pillar One Amount B. Amount B simplifies the appli - cation of transfer pricing for baseline marketing and distribution activities. The final report was incorpo - rated into the OECD’s Transfer Pricing Guidelines for
Multinational Enterprises and Tax Administrations (the “Transfer Pricing Guidelines”), and jurisdictions are deciding whether to introduce the simplified approach in their tax systems starting from fiscal years com - mencing on or after 1 January 2025. Currently, the global implementation of Amount B is still fragment - ed: only a few countries (eg, the Netherlands) have implemented Amount B in their domestic legislation or are in the process of implementing it (eg, Singapore), while the United States has published a proposal for public consultation to incorporate the simplified and streamlined approach as an optional safe harbour, with the future possibility of making it mandatory for in-scope taxpayers. Given the current status, Amount B seems to be only partially effective, and the only tool at the taxpayer’s disposal to achieve tax certainty remains those already well-known and established instruments, such as bilateral and multilateral advance pricing agreements (APAs), which prevent double taxation even without the application of a simplified approach. With reference to Pillar Two, following the position taken by the US Administration on the two Pillars, in June 2025 the G7 issued a statement acknowledging the US withdrawal and signalling readiness to work on a “side-by-side” (SbS) approach. On 5 January 2026, the OECD subsequently released the Side-by- Side Package, administrative guidance containing a new “Side-by-Side Safe Harbour” that currently rec - ognises only the US as an eligible jurisdiction listed in the OECD’s Central Record as having a qualified SbS regime. In addition, Brazil and India have signalled their intention to withdraw from the Global Minimum Tax Framework. On the other hand, Israel, Slovenia, Liechtenstein and Thailand have completed their reg - ulatory framework, implementing the Pillar Two global minimum rules. Among other things, the BEPS Inclusive Framework agreed on the design of a Transitional CbCR Safe Harbour as a short-term measure that would exclude MNE groups’ operations in lower-risk jurisdictions from the scope of global anti-base erosion (GloBE) rules in the initial years.
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INTRODUCTION Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
The Transitional CbCR Safe Harbour is based on country-by-country reporting (CbCR) data to calculate MNE groups’ revenue and income on a jurisdictional basis. The Transitional CbCR Safe Harbour uses the CbCR as a risk assessment tool to establish whether a top-up tax liability results under the GloBE rules. Furthermore, the agreed package includes a one-year extension of the Transitional CbCR Safe Harbour. Another relevant development concerns the contin - ued update of the OECD transfer pricing country pro - files, aimed at reflecting the current state of domestic legislation and the extent to which national rules align with the OECD Transfer Pricing Guidelines. Between 2025 and early 2026, the OECD released updated profiles of 62 jurisdictions (out of a total of 83 jurisdictions covered so far) and published for the first time the profiles of several additional jurisdictions, including Azerbaijan, Cabo Verde, Guatemala, Paki - stan, Thailand, UAE and Zambia. The update concerned new information on country- specific legislation and practice regarding the transfer pricing treatment of hard–to–value intangibles and the simplified and streamlined approach for baseline mar - keting and distribution activities. In the context of ensuring greater clarity in taxpayer- tax authority relations, on 2 February 2026, the OECD released an updated edition of the Manual on Effective Mutual Agreement Procedures (MEMAP) to help tax administrations and taxpayers resolve international tax disputes. The updated manual introduces a more structured roadmap for mutual agreement procedures (MAPs), starting from “pre-MAP consultations” and covering both unilateral and bilateral phases of the procedure. The update is also particularly valuable considering that the OECD has introduced specific protocols to assist tax administrations with fewer resources or less experience in complex international tax programmes. Moreover, in 2025 the OECD also updated the Model Tax Convention on Income and on Capital, provid - ing – among others – new and detailed guidance on short-term cross-border remote work and on the taxa - tion of income from natural resource extraction. The
update, approved by the OECD Council, aims to pro - vide greater certainty for governments and businesses worldwide. Trade developments and potential transfer pricing implications As mentioned, 2025 was characterised by the intro - duction of new tariff measures by the Trump adminis - tration between, among others, the United States and the EU. The current tariffs system, as of late February 2026, provides for the application of a 10% global tariff on most imports and, as mentioned by the US Treasury Secretary, it is likely that the tariffs will be increased in the course of 2026 to 15%. From a transfer pricing perspective, the introduction of tariffs may significantly affect cross-border trans - actions between the USA and the EU and increase uncertainty in international trade. In the short term, multinational groups are more likely to reassess pric - ing policies and contractual arrangements to allocate tariff-related costs within the group rather than imple - ment immediate structural changes to their supply chains. More substantial operational reorganisations, such as relocation of production or sourcing strate - gies, generally require longer planning horizons and significant investment. Therefore, the main short-term implications are expected to arise in the form of trans - fer pricing adjustments, renegotiation of intra-group arrangements and broader tax and business impact assessments aimed at mitigating the effect of higher duties. United Nations level The Subcommittee on Transfer Pricing established by the United Nations Committee of Experts on Interna - tional Cooperation in Tax Matters concluded its 2021– 2025 membership and issued six guidance reports: two of them sectoral (pharmaceuticals; agriculture), two transaction-specific (carbon offsets and credits; coronavirus disease (COVID-19) economic downturn) and two administrative (compliance assurance; dis - pute avoidance and resolution). The newly appointed subcommittee’s mandate for 2025–2029 includes updating the 2021 United Nations Practical Manual on Transfer Pricing for Developing Countries by adding or amending guidance on finan -
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INTRODUCTION Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
cial transactions, intra-group services, intangibles and simplification measures (safe harbours); sector- specific transfer pricing guidance for the information and communication technology industry; and sup - plementary guidance on unilateral advance pricing agreements addressing implementation challenges in the context of developing countries. EU level On 21 October 2025, as part of the EU’s 2026 Work Programme, which focuses on strengthening EU sov - ereignty, competitiveness and resilience, the Europe - an Commission formally withdrew its Proposal for a Council Directive on transfer pricing. The proposal, presented in September 2023, was intended to har - monise key transfer pricing rules of member states and ensure a common approach to the arm’s length principle within the EU. The proposed directive sug - gested alignment to the latest OECD Guidelines and acknowledged the possibility that future guidelines may be issued by the UN. With the EU withdrawal from building a common transfer pricing framework, the spotlight returns to national legislation aligned with the OECD Transfer Pricing Guidelines. On the side of non-legislative initiatives, it is worth mentioning ETACA, a cross-border co-operative com - pliance programme, between tax administrations and MNE groups with global consolidated group revenue above EUR750 million, focused on transfer pricing risks. Covered transactions are intercompany trans - actions where one of the parties performs only limited functions and/or carries only limited risks and/or does not make unique and valuable contributions. These would include routine distribution activities, contract manufacturing activities and low value-adding intra- group services. Following the First Pilot Phase, EU member states, together with the European Commis - sion, have launched the Second Pilot, with 17 member states having expressed their willingness to partici - pate in the programme. VAT and transfer pricing in the EU As far as value added tax (VAT) is concerned, recent case law from the Court of Justice of the European Union has addressed the interaction between transfer pricing adjustment and VAT in Arcomet (ECJ C-726/23 – 4/09/2025).
The decisions concern whether year-end transfer pricing adjustments (eg, lump-sum payments made to align margins) should be treated as taxable trans - actions for VAT purposes or merely as financial flows. According to the EU court, a transfer pricing adjust - ment may qualify as a taxable transaction if the pay - ment is linked to identifiable intra-group services or supplies. In the same argument, Advocate General Kokott issued an Opinion in the Stellantis Portugal case (C-603/24 – 15/01/26), for which the judgment of the court is still pending. From a legislative perspective, in March 2025 the Council of the European Union adopted the “VAT in the Digital Age” (ViDA) package. This package provides that, where a transfer pricing adjustment is deemed relevant for VAT purposes, it can no longer be managed through a single, aggregate year-end debit or credit note, but it must be reflected in the digital records of the related transaction. Tax certainty and the transfer pricing framework: global statistics for MAPs and APAs On 31 October 2025, the OECD released its annual statistics on MAPs, including data on bilateral and multilateral APAs for 2024. These statistics monitor the implementation of Action 14 of the G20/OECD BEPS Project, which aims to verify the effectiveness of international tax dispute resolution mechanisms. The data covers 141 jurisdictions, providing a nearly complete representation of MAP cases worldwide. The APA statistics, derived from 49 jurisdictions, rep - resent additional efforts under Action 14. The global average MAP case closure time is 27.4 months (30.9 months for transfer pricing cases and 24.5 months for other cases). Trends show an increase in open and closed cases. The success rate for agree - ments concluded is 76%. In the absence of an arbi - tration clause, competent authorities are required to make efforts to eliminate double taxation, though there is no specific obligation concerning the results. Regarding APAs, according to the 2024 OECD APA statistics, 80 jurisdictions reported allowing bilateral
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INTRODUCTION Contributed by: Paolo Ludovici, Luca Tortorella, Marlinda Gianfrate and Angelica Masciulli, Gatti Pavesi Bianchi Ludovici
APAs, with 49 actively managing cases. In 2024, the number of bilateral APAs filed increased by 3%, and roughly a quarter of the inventory was closed, consist - ent with 2023. The average closure time increased to 39.6 months from 36.8 months in 2023. Bilateral APAs show increased efficiency and usage but remain time- intensive, making them more suitable for complex, high-value cases. The rise of co-operative compliance programmes and the OECD’s enhanced International Compliance Assurance Programme (ICAP) highlight the importance of adhering to the Transfer Pricing Guidelines. However, participation in co-operative compliance programmes does not eliminate the risk of tax dis - putes in other jurisdictions involved in the same intercompany transactions. Transfer pricing involving multiple jurisdictions requires a strategic evaluation of tools to manage the risks of double taxation, as no single mechanism guarantees complete tax certainty. Compliance with transfer pricing rules: relevance for single states and taxpayers Beyond the strategic tools of co-operative compliance mentioned above, adherence to transfer pricing rules remains a key priority for both states and taxpayers. For example, the Internal Revenue Service (IRS) in the United States has strengthened transfer pricing enforcement through targeted initiatives and expand - ed audit activity. In parallel, the Supreme Court’s Lop- er Bright decision (June 2024), which overturned the Chevron doctrine, has started to reshape tax litigation by requiring courts to exercise independent judgment and adopt the best reading of the statute rather than automatically deferring to agency interpretations. This shift has influenced tax cases, with the courts scru - tinising IRS rules more closely, as in the recent 3M case where the Eighth Circuit parsed Section 482 of the Code sentence by sentence and, relying on Loper Bright , concluded that Treasury Regulation Section 1.482-1(h)(2) did not offer the best reading of the stat - ute. In 2025, several Supreme Court decisions signifi - cantly clarified the application of transfer pricing rules in Korea. The courts reaffirmed that the burden of proof for transfer pricing adjustments lies with the
tax authorities and emphasised the need for a robust comparability analysis when applying the Transac - tional Net Margin Method (TNMM), particularly with respect to differences in products, functions and risks. The Supreme Court also clarified that prices agreed between shareholders in a joint venture cannot automatically be considered arm’s length and must be supported by recognised transfer pricing meth - ods under the Law for Coordination of International Taxes Affairs (LCITA). In addition, legislative amend - ments introduced in December 2025 strengthened the documentation requirements for self-initiated transfer pricing adjustments, requiring taxpayers to provide evidence that a corresponding adjustment has been recognised in the counterparty’s jurisdiction. Finally, Korea has continued to expand its international tax framework and administrative transparency, including the expansion of its treaty network to 97 tax treaties and the publication of the 2024 APA Annual Report in November 2025. Other jurisdictions have also introduced developments aimed at strengthening compliance and dispute-pre - vention mechanisms. In December 2025, the UAE issued non-binding general guidance on procedural aspects of APAs. In Austria, the Tax Amendment Act 2025 introduced a unified 15% minimum tax rate for foreign subsidiaries and adopted the OECD’s updat - ed rules on home office permanent establishments. Cyprus has also entered a phase of legislative reform, including targeted changes such as an expanded defi - nition of connected persons, higher Local File thresh - olds and a shorter tax return filing deadline. Recent developments in Switzerland, by contrast, mainly arise from case law and changes in the interna - tional trade environment. The Swiss Federal Supreme Court confirmed the use of the cost-plus method in a hydropower case and accepted a cost base including income taxes and a notional return on equity, although this approach applies only in a domestic context. In addition, a cantonal court decision reaffirmed the Swiss principle of periodicity, rejecting the use of multi-year averaging to justify low profitability in a spe - cific year. Finally, increased tariff volatility since 2025 has raised new challenges in the interaction between transfer pricing and customs valuation in Switzerland.
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AUSTRIA
Czech Republic
Germany
Slovak
Vienna
Austria
Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek Grant Thornton Austria Contents 1. Rules Governing Transfer Pricing p.12 1.1 Statutes and Regulations p.12 1.2 Current Regime and Recent Changes p.12 2. Definition of Control/Related Parties p.12 2.1 Application of Transfer Pricing Rules p.12 3. Methods and Method Selection and Application p.13 3.1 Transfer Pricing Methods p.13 3.2 Unspecified Methods p.13 3.3 Hierarchy of Methods p.13 3.4 Ranges and Statistical Measures p.13 3.5 Comparability Adjustments p.13 4. Intangibles p.14 4.1 Notable Rules p.14 4.2 Hard-to-Value Intangibles p.14 4.3 Cost Sharing/Cost Contribution Arrangements p.14 5. Adjustments p.14 5.1 Upward Transfer Pricing Adjustments p.14 5.2 Secondary Transfer Pricing Adjustments p.14 6. Cross-Border Information Sharing p.14 6.1 Sharing Taxpayer Information p.14 6.2 Joint Audits p.15 6.3 Simultaneous Controls p.15 6.4 International Compliance Assessment Programme (ICAP) p.15 7. Advance Pricing Agreements (APAs) p.16 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing p.16 7.2 Administration of Programmes p.16 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures p.16 7.4 Limits on Taxpayers/Transactions Eligible for an APA p.16 7.5 APA Application Deadlines p.17 7.6 APA User Fees p.17 7.7 Duration of APA Cover p.17 7.8 Retroactive Effect for APAs p.17 8. Penalties and Documentation p.17 8.1 Transfer Pricing Penalties and Defences p.17 8.2 Transfer Pricing Documentation p.18
Hungary
Italy
Slovenia
Croatia
9. Alignment With OECD Guidelines p.18 9.1 Alignment and Differences p.18 9.2 Arm’s Length Principle p.18 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project p.18 9.4 Impact of BEPS 2.0 p.18 9.5 Pillar One Amount B p.19 9.6 Entities Bearing the Risk of Another Entity’s Operations p.19 9.7 Allocation of Profits to Permanent Establishments (PEs) p.19 10. Relevance of the United Nations Practical Manual on Transfer Pricing p.19 10.1 Impact of UN Practical Manual on Transfer Pricing p.19 11. Safe Harbours or Other Unique Rules p.19 11.1 Transfer Pricing Safe Harbours p.19 11.2 Rules on Savings Arising From Operating in the Jurisdiction p.19 11.3 Unique Transfer Pricing Rules or Practices p.20 11.4 Financial Transactions p.20 12. Co-Ordination With Customs Valuation p.20 12.1 Co-Ordination Requirements Between Transfer Pricing and Customs Valuation p.20 13. Controversy Process p.20 13.1 Options and Requirements in Transfer Pricing Controversies p.20 14. Judicial Precedent p.20 14.1 Judicial Precedent on Transfer Pricing p.20 14.2 Significant Court Rulings p.20 15. Foreign Payment Restrictions p.22 15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions p.22 15.2 Restrictions on Outbound Payments Relating to Controlled Transactions p.22 15.3 Effects of Other Countries’ Legal Restrictions p.22 16. Transparency and Confidentiality p.22 16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes p.22 16.2 Use of “Secret Comparables” p.22
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
Grant Thornton Austria is a leading firm in tax, au - dit and advisory, with a local team of around 300 experts. As a member firm of Grant Thornton Inter - national (a global network of 80,000 professionals across 150 countries), the firm helps businesses of all sizes and from all industries to efficiently navigate complex regulations through tailored, strategic tax advice paired with innovative solutions, and pursues a holistic approach that covers every step of transfer pricing – from determination of transfer prices and planning to documentation and defence. Given the
growing documentation requirements, stricter regula - tions and increased penalties, it is crucial to regularly review and monitor transfer pricing policies. A multi - disciplinary team of highly qualified experts supports clients throughout the entire transfer pricing life cycle – ensuring compliance, meeting legal and transpar - ency standards, and safeguarding against audits and disputes. With its proactive approach, Grant Thorn - ton Austria is a trusted partner for all transfer pricing needs, and provides advice in all associated areas of tax.
Authors
Raphael Holzinger is a partner and head of tax at Grant Thornton Austria, where he specialises in transfer pricing, national and international tax structuring, and transaction advice. Raphael advises clients on business
pricing structuring. Matthias has extensive experience of advising on M&A transactions, and supports clients in navigating complex tax matters. Throughout his career at Grant Thornton, Matthias has also contributed to various publications, sharing his expertise in tax and transaction advisory.
tax law, international tax law and rulings/advance pricing agreements, and supports them in tax audits, appeals, mutual agreement procedures and arbitration procedures. He has been recognised with prestigious awards, and is an accomplished author of academic articles as well as a sought-after lecturer at professional and academic events in Austria and internationally.
Claudia Synek is a certified tax adviser in the tax department at Grant Thornton Austria, where she specialises in national and international tax and transaction advisory services. Claudia’s expertise
includes transfer pricing, international tax law and business tax law. She also supports clients in tax audits and appeal proceedings, providing strategic guidance to navigate complex tax matters effectively.
Matthias Jancura is a tax adviser in the tax department at Grant Thornton Austria, where he specialises in national and international tax structuring and transaction advisory services, with a focus on transfer
Grant Thornton Austria Gertrude-Froehlich-Sandner-Straße 1/Top 13 1100 Vienna Austria Tel: +43 1 505 4313
Email: marketing@at.gt.com Web: www.grantthornton.at
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
1. Rules Governing Transfer Pricing 1.1 Statutes and Regulations The legislative framework governing Austria’s material transfer pricing policies is predominantly enshrined within the Income Tax Act (ITA), Section 6 paragraph 6, and is founded on the arm’s length principle as articu - lated in Article 9 of the OECD Model Tax Convention on Income and Capital. This adherence to the OECD Transfer Pricing Guidelines for Multinational Enter - prises and Tax Administrations (the “OECD Guide - lines”) is evidenced by the absence of rigid formulae and the predominance of principle-based guidelines. Consequently, Austria’s transfer pricing policies are largely aligned with the OECD guidelines. The OECD Guidelines (last updated in January 2022) are not mentioned in Austrian legislation but form the basis for the Austrian Transfer Pricing Guidelines (ATPG), which are publicly available, non-binding guidance designed to ensure uniform interpretation of transfer pricing through tax audits and, consequently, for taxpayers. Moreover, the Transfer Pricing Documentation (Trans - fer Pricing Documentation Act (TPDA)) stipulates the preparation of transfer pricing documentation (master file and local file). In addition, the TPDA obliges the preparation and filing of a country-by-country report (CbCR) or CbCR notification. Although it is not mandatory to file formal transfer pricing documentation with the Austrian tax authori - ties (ATA) outside the scope of the TPDA, it is rec - ommended to avoid unfavourable adjustments in the course of a tax audit by the ATA. Owing to the option to estimate tax bases for tax authorities (based on the Federal Fiscal Code (FFC)), it is considered benefi - cial to prepare – and submit upon request – a proper transfer pricing analysis and documentation (accord - ing to the general principles of the FFC), even if one does not fall within the scope of the TPDA. 1.2 Current Regime and Recent Changes The initial ATPG were published in 2010, with the most recent revisions occurring in 2021. These revi - sions have been extensively reviewed, incorporating the updates of the OECD Guidelines as a conse - quence of the OECD Base Erosion and Project Shift - ing (BEPS) project as well as national and interna -
tional case law. Moreover, the ATPG 2021 underwent revisions in March 2025 ( Wartungserlass 2025 ). It is expected that the most recent contributions from the OECD (OECD-MC Update 2025), along with prevailing national and international case law, will be subject to further updates soon. Furthermore, it is pertinent to note that the TPDA is applicable for financial years subsequent to 31 December 2016. It is important to emphasise that the TPDA has not been subject to any revisions since its initial publication. 2. Definition of Control/Related Parties 2.1 Application of Transfer Pricing Rules For material purposes, Section 6 paragraph 6 of the ITA defines associated enterprises based on partici - pations of more than 25%. However, even below this percentage threshold, it is recommended to comply with the arm’s length principle – given that other pro - visions in different Austrian tax acts (eg, Section 8 of the Corporate Income Tax Act) could also give rise to negative tax consequences (eg, hidden profit distribu - tions) in the event of non-compliance. For documentation purposes in accordance with the TPDA, enterprises are defined as associated if they are part of a consolidated multinational group of com - panies – ie, if they have the same shareholder with a stake of more than 50% and if at least one enterprise of the group is located outside Austria. Each transac - tion between associated enterprises is defined as a controlled transaction. However, it should again be noted that transactions between non-affiliated parties (ie, those lacking a joint controlling interest of more than 50%) are required to adhere to the arm’s length principle. These transactions are not subject to the TPDA but might be subject to documentation require - ments in light of the FFC.
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
3. Methods and Method Selection and Application 3.1 Transfer Pricing Methods Neither the TPDA nor any other Austrian tax act explicitly lists specific transfer pricing methods. How - ever, the ATPG catalogue the transfer pricing methods according to the OECD Guidelines. According to the principles of the ATPG, the most appropriate pricing method should be selected on a transaction-by-transaction basis, providing the most reliable measure of an arm’s length result in each case. The prevailing OECD methods – namely, the compa - rable uncontrolled price, resale price, cost plus, trans - actional net margin and profit split methods – are all recognised. However, it is essential that the chosen method be aligned with the entity’s functional and risk profile. The application of alternative methods is per - missible, provided they are justifiable and appropriate. 3.2 Unspecified Methods As stated in 3.1 Transfer Pricing Methods , the appli - cation of alternative methods is permissible according to the ATPG, provided they are justifiable and appro - priate, as outlined in the OECD Guidelines. 3.3 Hierarchy of Methods There is no established hierarchy, as the ATPG align with the OECD Guidelines. However, in practice, a “natural hierarchy” tends to favour the comparable uncontrolled price method (if reasonably applicable). This can also be deduced by the sequence in which the transfer pricing methods are enumerated in the ATPG. 3.4 Ranges and Statistical Measures Ranges or statistical measures are generally author - ised by the ATPG, so long as these are justifiable and appropriate. In Austria, the determination of transfer pricing ranges for routine business units is primarily guided by the arm’s length principle as set out in the ATPG. In practi - cal application, commercial databases are commonly used to identify profit margins of comparable inde - pendent entities.
Where a sufficiently robust set of comparables exists (as a rule of thumb, at least seven comparable busi - ness units should be included), statistical means may be employed to further strengthen the reliability of the analysis. In particular, the use of quartiles serves to narrow the arm’s length range by excluding the lowest and highest 25% of outcomes within the full dataset. This process results in the interquartile range, which is widely recognised as a reliable indicator for determin - ing arm’s length profitability, especially in cases where the underlying data exhibits variability or includes out - liers. Generally, no permanent loss-makers (ie, com - parable business units with a negative result in two out of three years under review) should be included in the final set of comparables (unless the functional and risk profile would suggest including them in exceptional cases). 3.5 Comparability Adjustments Year-end adjustments (YEAs) are typically regarded as a contentious financial practice and are only permitted under specific conditions. It is generally recommended that taxpayers adhere to the ex ante approach when determining their pricing with associated enterprises. This is due to the fact that third parties are unlikely to concur with subsequent price adjustments aimed at aligning the result of a contractual partner with a desired target value. It is therefore advisable to under - take year-round monitoring and make the necessary price adjustments. However, a YEA might be deemed at arm’s length if, for instance: • the price-determining factors are agreed in advance; • the ex ante pricing is subject to significant uncer - tainties; or • reasonable efforts have been made by the taxpayer during the year to achieve an arm’s length transfer price (monitoring during the year). If the arm’s length values applied in the context of the implementation of a transfer pricing method constitute a range, it can be deduced that the adjustment will invariably result in a value that falls within the arm’s length range, as determined on the basis of ex ante knowledge.
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
4. Intangibles 4.1 Notable Rules
tive, the execution of the adjustments must follow the rules of the FFC. If the profits of a domestic group company belong - ing to a multinational group are found to have been increased as a result of a violation of the arm’s length principle, as outlined in Section 6 paragraph 6 of the ITA (in conjunction with Article 9 of the OECD Model Tax Convention on Income and Capital), this consti - tutes the primary adjustment. Typically, a “primary adjustment” – whether occurring within Austria or internationally – should result in a “corresponding adjustment” in instances where Austria is involved, with the objective being to prevent the occurrence of double (non-)taxation. 5.2 Secondary Transfer Pricing Adjustments There are rules on secondary transfer pricing adjust - ments in the ATPG. Indeed, in the event of a breach of the arm’s length principle in cross-border transactions between associated enterprises, this must be given full consideration as previously unrecognised operat - ing income or an overstated operating expense. This will inevitably have repercussions on the taxable busi - ness assets and thus lead to secondary adjustments. The regulations pertaining to secondary adjustments within the ATPG are largely consistent with the OECD Guidelines. 6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information Austria has a plethora of treaties in place – the list of which is regularly updated by the Austrian Ministry of Finance. The aforementioned list includes links to the treaty texts. The following agreements have been entered into by Austria with other jurisdictions: • double taxation conventions regarding income and capital with approximately 90 jurisdictions; • tax information exchange agreements with approx - imately seven jurisdictions (as there is no double taxation convention in place with those jurisdic - tions); and • double taxation conventions regarding inheritance and gift tax with approximately ten jurisdictions.
The ATPG generally adhere to the OECD Guidelines with regard to intangibles. Hence, there are no special rules in place. It is important to note that the term “intangible” as used in transfer pricing regulations should not be understood in the traditional legal, tax or accounting sense. Rather, it should be interpreted independently for the purposes of the ATPG and the OECD Guide - lines. Furthermore, it is crucial to consider the legal and economic owner of an intangible separately; that is to say, the DEMPE (development, enhancement, maintenance, protection and exploitation) functions The ATPG generally adhere to the OECD Guidelines concerning hard-to-value intangibles; consequently, there are no specific regulations in place. On this basis, if the tax authorities can confirm the reliability of the information on which the ex ante price agree - ment is based, no corrections should be made on the basis of ex post results. Furthermore, it is only possible to make a transfer pricing adjustment (primary adjustment) for a hard-to- value intangible transaction in Austria in accordance with national procedural regulations. 4.3 Cost Sharing/Cost Contribution Arrangements In Austria, cost sharing/cost contribution arrange - ments are a generally recognised concept. The ATPG typically adhere to the OECD Guidelines with regard to such arrangements and, consequently, there are no specific regulations in place. must always be taken into account. 4.2 Hard-to-Value Intangibles 5. Adjustments 5.1 Upward Transfer Pricing Adjustments The ATPG permit both “primary adjustments” and “secondary adjustments”, which are possible after the filing of the tax return. However, from a tax perspec -
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
Further, Austria entered into the following multilateral agreements. • The EU Arbitration Convention. • The Convention on Mutual Administrative Assis - tance in Tax Matters (the “Mutual Administrative Assistance Convention”). • Multilateral competent authority agreements, such as: (a) the Multilateral Competent Authority Agree - ment on Automatic Exchange of Financial Account Information; and (b) the Multilateral Competent Authority Agree - ment on the Exchange of Country-By-Country Reports. • The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. The ATA publish a list of jurisdictions with which prop - er tax information exchange exists on an annual basis. 6.2 Joint Audits In principle, Austria is willing to engage in joint audits. Cross-border co-operation between tax administra - tions in the area of transfer pricing can take various forms (eg, tax information exchange, secondment of auditors and joint audit; see also 6.3 Simultaneous Controls ). The legal bases for such co-operation are usually the respective double taxation conventions, the Mutual Administrative Assistance Convention, or the Directive on Administrative Co-operation (DAC) in Direct Taxation. In the field of transfer pricing, joint audits represent a pivotal instrument in achieving final clarity on the rec - ognition of the arm’s length nature of transfer prices at the audit level. This approach effectively avoids the intensive and complex appeals and mutual agreement procedures that would otherwise be necessary for all parties involved. However, joint audits are seldom
EU‑AHG), which has been in force since 1 January 2013. According to this provision, the central liaison office or several member states may, upon proposal by the competent tax authorities, agree to conduct simultaneous controls. Authorised tax auditors have the possibility to partici - pate in simultaneous controls either through on‑site meetings in other member states or through the par - ticipation of foreign auditors in Austria. Furthermore, when information is requested from the competent Austrian authority, auditors may be present on the premises of the authority during official inves - tigations or may participate via electronic means of communication. Austria has already participated in several pilot pro - jects. However, simultaneous controls are still only applied sporadically in practice, and it remains uncer - tain when they will become a commonly used instru - ment. 6.4 International Compliance Assessment Programme (ICAP) Austria first joined the International Compliance Assurance Programme (ICAP) in the second pilot phase, which was launched in 2019; it has been part of the regular programme since the completion of this phase, which commenced in September 2021. At the EU level, the European Trust and Cooperation Approach (ETACA) has been developed, which closely resembles ICAP and has been in its pilot phase since March 2022. The programme is designed to enable a co-ordinated and expedited assessment of cross‑bor - der transactions by all tax authorities involved, thereby enhancing legal certainty for multinational enterprises. Austria participated in the first pilot phase and will also take part in the second phase – this is scheduled to commence in January 2026 with the admission phase, and is expected to conclude in September 2026 with the outcome phase.
applied in Austrian audit practice. 6.3 Simultaneous Controls
Austria has been conducting simultaneous controls since 2013. The current framework governing simul - taneous controls is laid down in Section 12 of the EU Administrative Assistance Act ( EU-Amtshilfegesetz
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AUSTRIA Law and Practice Contributed by: Raphael Holzinger, Matthias Jancura and Claudia Synek, Grant Thornton Austria
7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing The Austrian system incorporates an APA programme, encompassing unilateral measures (referred to as “advance ruling”) in addition to bilateral and multilat - eral measures. A bilateral and multilateral APA can be required to clarify the basis for transfer pricing for transactions falling under Article 7 or Article 9 of the OECD Model Tax Convention on Income and Capital and to clarify how the profits realised are distributed among the tax jurisdictions concerned. A bilateral and multilateral APA may concern transfer pricing issues of one or more taxpayers or be limited to individual intra-group transactions. A bilateral and multilateral APA is thus a formal written agreement between the ATA and the tax authorities of a treaty partner state, with the aim of governing the appropriate transfer pricing method and transfer prices for a forward-looking period (usu - ally three to five years). In other words, a bilateral and multilateral APA is concluded for future years and transactions. The initiation of bilateral and multilateral APAs is typi - cally pursued by the taxpayer concerned. Neverthe - less, the taxpayer possesses no legal entitlement to the successful execution of the APA in question. It is important to note that the resolution of bilateral and multilateral APAs is often a process that extends over several years. It is evident that bilateral and multilateral APAs are grounded in the framework of the mutual agreement procedure articles of the relevant double tax treaties, as outlined in Article 25 of the OECD Model Tax Con - vention on Income and Capital. Consequently, the absence of domestic regulations pertaining to bilateral and multilateral APAs is notable. Unilateral advance rulings can be requested by the taxpayer on the basis of Section 118 of the FFC in the case of international tax topics, including transfer pric - ing topics. However, it is to be noted that a unilateral advance ruling can only be requested for future fact
patterns, meaning that the facts of the case must not already have been implemented. 7.2 Administration of Programmes The Austrian Ministry of Finance administers the pro - gramme. 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures As mentioned in 7.1 Programmes Allowing for Rul- ings Regarding Transfer Pricing and stated in Article 25 of the OECD Model Tax Convention on Income and Capital, bilateral and multilateral APAs are based on the mutual agreement procedure articles of the respective double taxation conventions. If negotia - tions on mutual agreement procedures (for the past) and APAs (for the future) take place at the same time for the same fact pattern, they are usually combined. 7.4 Limits on Taxpayers/Transactions Eligible for an APA The scope of the respective double taxation conven - tion imposes limitations on bilateral and multilateral APAs with regard to future transactions that fall under Article 7 or Article 9 of the OECD Model Tax Conven - tion on Income and Capital. However, in cases where a past fact pattern is concerned, the APA would then simply be a mutual agreement procedure. Unilateral advance rulings according to Section 118 of the FFC are available for several tax areas, includ - ing “international tax law”, which also covers transfer pricing issues. However, the ATA typically do not con - firm the correctness of specific transfer prices under particular facts and circumstances in such unilateral advance rulings. They usually only give answers to legal questions raised by taxpayers that will occur in future cases, if the legal questions are of particular interest. In instances where the underlying facts and circumstances are identical or only differ margin - ally upon materialisation, the result of the unilateral advance ruling becomes legally binding for the ATA. According to the law, the ATA are required to conclude a unilateral advance ruling case within a maximum period of two months after filing of the ruling request; however, in practice, this waiting period is often sig - nificantly longer.
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