On 13 May 2026, the European Court of Justice (ECJ) ruled on the VAT treatment of intra-group transfer pricing adjustments in the Case C-603/24 case involving Stellantis’ Portuguese subsidiary. The court found that retroactive transfer pricing adjustments linked to distribution costs do not automatically qualify as payment for services subject to VAT. According to the ruling, VAT applies only where there is a direct link between identifiable services and the payment made under a legal relationship involving reciprocal obligations.
To read the ECJ Ruling, click here.
EU member states have agreed to further develop a non-binding transfer pricing platform as an alternative to the European Commission’s proposed legislation on harmonizing transfer pricing rules. At a recent working party meeting, representatives decided to continue refining the platform and its structure into 2025, with Poland leading discussions during its EU presidency starting in January 2025. The European Commission’s proposal aimed to standardize the application of OECD transfer pricing guidelines across the EU. However, member states opposed the idea, citing concerns over losing regulatory flexibility. Instead, they chose a “soft law” approach, allowing coordination and discussions on cases without binding regulations. Disagreements persist over the platform’s authority and whether it should have any legally binding power, as countries seek a balance between cooperation and sovereignty.
To access the European Commission’s Directive on transfer pricing, click here.