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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