Do Transfer Pricing Adjustments Trigger VAT? Transfer pricing adjustments made to correct intra-group prices do not automatically create a VAT liability as a separate supply of services. The CJEU confirmed this in Stellantis Portugal (C-603/24), ruling that a price change affects the taxable amount of the original transaction – not a new one. Introduction The
The OECD’s January 2026 Side-by-Side Safe Harbor limits the application of Pillar Two’s Income Inclusion Rule and Undertaxed Profits Rule to eligible US-parented multinationals. Where validly elected, top-up tax under those two rules is treated as zero. The Qualified Domestic Minimum Top-up Tax, however, continues to apply in every jurisdiction that has adopted it. Five
The Profit Split Method (PSM) is one of five OECD-recognized transfer pricing methods. It identifies the combined profits from controlled transactions and allocates them between related parties based on their contributions. It applies most appropriately when both parties make unique contributions, share significant risks, or operate in highly integrated structures. How to Apply the PSM:
The Transactional Net Margin Method (TNMM) benchmarks a tested party’s net profit margin against comparable independent companies. It is the most widely used transfer pricing method globally. It works best for routine entities such as distributors, contract manufacturers, and service providers. When a multinational group prices transactions between related parties, tax authorities require those prices
It depends. Some countries ask for the local file preparation if there are transactions, no matter the value of them, some ask only if the transaction or entity exceeds a set threshold. To understand if you need to have a local file documentation, you need to consider a few main aspects:
Global minimum tax is an OECD initiative introduced as a part of the BEPS program. The idea behind this initiative is to ensure that big multinational corporations are taxed at an effective tax rate of at least 15%. Most countries added this initiative to their local legislation. The entry into force date varies among the countries, for example, the EU has implemented the regulation from January 2024.
Amount B is a part of Pillar One from the OECD BEPS program. The purpose of Amount B is to act as a safe harbor for baseline marketing and distribution services.
Currently, the future of Amount B isn’t clear. As its implementation is optional, some countries including Germany and the Netherlands, already announced that they aren’t going to implement it.
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