Changes from report parliamentary committee draft to plenary report

AddedArticle 6 – paragraph 3 – point b: (b) Member States shall declare the request admissible within 40 days by virtue of a notification to the taxpayer if all the information provided in paragraph 3, point (a), has been submitted. In the same timeframe, Member States shall notify the taxpayer of the lack of any necessary information and grant at least 40 days to provide it. If the taxpayer does not provide the requested information within the assigned deadline, the request shall be rejected as inadmissible.

RemovedArticle 3 – paragraph 1 – point 18: (18) ‘OECD Transfer Pricing Guidelines’ means the latest version of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations as of the entry into force of this Directive and any further amendments to these OECD Transfer Pricing Guidelines that the Union approved in the context of the OECD Committee on Fiscal Affairs via the adoption of a Union position under Article 218 TFEU;

AddedArticle 6 – paragraph 3 – point c: (c) Member States shall ensure that when the double taxation arises from a primary adjustment made in another Member State, the procedure is concluded within 200 days from the receipt of the taxpayer’s request with a reasoned act of acceptance or rejection. The procedure can be extended once by a period of 100 days if the tax payer and the Member States concerned all agree to such extension.

RemovedArticle 3 – paragraph 1 – point 19: deleted

AddedArticle 6 – paragraph 3 – point d: (d) In the case of acceptance, Member States shall communicate immediately to the tax authority of the other relevant jurisdiction the recognition of the corresponding adjustment.

RemovedArticle 5: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 6 – paragraph 3 a (new): 3a. For the purpose of paragraphs 1, 2 and 3, Member States shall use all available procedures and arrangements provided by the Directive on Administrative Cooperation (DAC).

Change 4

ChangedArticle 6 – paragraph 5 – point a a (new): (aa) the downward adjustment isdoes not leadinglead to double non-taxation and there is a certainty on the part of the Member State performing the downward adjustment thatmeaning the downward adjustment is included in the taxable profits of the associated enterprise in the other jurisdiction;

Change 5

RemovedArticle 8: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 11 – paragraph 3 – point a: (a) none of the differences (if any) between the transactions being compared or between the enterprises undertaking those transactions could materially affect the price or margin in the open market;

RemovedArticle 9: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 14 – paragraph 2: 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 18 to lay down further rules, consistent with the latest internationally recommended Transfer Pricing Guidelines, from either the OECD or the United Nations, on how the arm’s length principle and the other provisions laid down in Chapter II of this Directive are to be applied in specific transactions to ensure more tax certainty and mitigate the risk of double non-taxation and double taxation, and reduce tax disputes and tax abuse. / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

RemovedArticle 10: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 14 – paragraph 2 a (new): 2a. The Commission may adopt delegated acts in accordance with Article 18 to lay down further rules, such as the introduction of safe harbours, to simplify the application of the arm’s length principle in the Union, to ensure more tax certainty and mitigate the risk of double non-taxation and double taxation, and to reduce tax disputes and tax abuse.

RemovedArticle 11: deleted / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 14 – paragraph 2 b (new): 2b. The Commission may adopt a delegated act in accordance with Article 18 laying down rules to integrate in this Directive the proposed simplified approach to transfer pricing compliance for distribution and manufacturing activities as referred to in Council Directive XX/XX/EU on Business in Europe: Framework for Income Taxation (BEFIT).

Change 6

ChangedArticle 12: deleted / (deleted) / (deleted) / (deleted)14 /– (deleted)paragraph /3: (deleted)deleted

Change 7

RemovedArticle 13 – paragraph 1: 1. Member States shall ensure that a taxpayer has sufficient information and analysis available to verify that the conditions of its transactions with associated enterprises are in accordance with Article 4(1) and should at least encompass the identified commercial and financial relations, the appropriate transfer pricing method as recognized by the OECD Transfer Pricing Guidelines and the way to chose the most appropriate method, the comparability analysis, and the arm’s length range.

AddedArticle 14 a (new): Article14a / Re-establishment of the EU Joint Transfer Pricing Forum / 1. The Commission shall establish and chair the European Forum on Transfer Pricing (EFTP). The EFTP shall provide advice and assistance to the committee within the meaning of Article 17, notably to assess the need for any adjustment to this Directive with the objective of guaranteeing the continuous uniformity of transfer pricing methodologies within the Union and on the global stage, most importantly taking into account developments at OECD or UN level. / 2. The EFTP shall be composed of representatives of Members States and a balanced representation of tax payers, academics and civil society. The European Parliament shall be a member of the EFTP as an observer. The conditions for membership shall be decided by the committee as referred to in Article 17.

RemovedArticle 14 – paragaph -1 (new): -1. Member States shall ensure that transfer pricing rules are applied in a manner consistent with the latest OECD Transfer Pricing Guidelines.

AddedArticle 14 b (new): Article 14b / Extension of the European Trust and Co-operation Approach (ETACA) initiative / 1. The scope of the European Trust and Cooperation Approach (ETACA) shall include transfer pricing reviews of specific intra-Union flows by participating Member States and not only low value-added transactions, as is currently the case. / 2. Member States are invited to establish a link between the ETACA and APAs to ensure the ETACA acts as a fast-track for finding stable solutions when problems arise during the review process.

RemovedArticle 14 – paragraph 2: 2. The Council may lay down further rules, consistent with the OECD Transfer Pricing Guidelines, on how the arm’s length principle and the other provisions laid down in Chapter II of this Directive are to be applied in specific transactions to ensure more tax certainty and mitigate the risk of double non-taxation and double taxation, and reduce tax disputes and tax abuse. / (deleted) / (deleted) / (deleted) / (deleted) / (deleted) / (deleted)

AddedArticle 15 – paragraph 1: 1. Every three years, the Commission shall examine and evaluate the application, the impact as well as the interplay of this Directive with the latest OECD or UN guidelines and submit a report on its evaluation to the European Parliament and to the Council, to be accompanied, if appropriate, by a legislative proposal. The first report shall be submitted by 31 December 2029. The Commission may deviate from those timelines when new guidelines on Transfer Pricing are agreed at OECD or UN level.

RemovedArticle 14 – paragraph 2 a (new): 2a. The Council may lay down further rules to simplify the application of the arm’s length principle in the Union, such as the introduction of safe harbours, to ensure more tax certainty and mitigate the risk of double non-taxation and double taxation, and reduce tax disputes and tax abuse.

RemovedArticle 14 – paragraph 3: 3. The rules referred to in paragraphs 2 and 2a shall be taken by means of Council implementing acts based on a proposal from the Commission.

RemovedArticle 15 – paragraph 1: 1. The Commission shall examine and evaluate the application of this Directive every 3 years and submit a report on its evaluation to the European Parliament and to the Council. The first report shall be submitted by 31 December 2029.

Article 15 – paragraph 2: 2. Member States shall communicate to the Commission relevant information for the evaluation of this Directive with a view to improving the application of the arm’s length principle, to reducing double non-taxation and double taxation as well as to combatting tax abuse and tax disputes, in accordance with paragraph 3.

Article 15 – paragraph 5: 5. Information communicated to the Commission by a Member State under paragraph 2, as well as any report or document produced by the Commission using such information, may be transmitted to other Member States and the European Parliament. The information shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it.

Change 8

ChangedArticle 16 – paragraph 2: 2. Information, including personal data, processed in accordance with this Directive shall be retained only for as long as necessary to achieve the purposes of this Directive, in accordance with each data controller’s national law on statute of limitations, but in any case no longer than 10 years as of the moment when personal data are processed for the purposes specified inof this Directive.

Change 9

RemovedArticle 19 – paragraph 1 a (new): 1a. The European Parliament may attend as observer the negotiations on the OECD Transfer Pricing Guidelines in the relevant OECD working parties and at the OECD Inclusive Framework.

AddedArticle 18 – paragraph 1: 1. The power to adopt the delegated acts referred to in Article 3, second subparagraph, Article 13 and Article 14(2), (2a) and (2b) shall be conferred on the Commission subject to the conditions laid down in this Article.

RemovedArticle 19 a (new): Article 19a / Sunset clause / 1. This Directive shall cease to apply as of 1 January 2035 for MNE groups that fall under the scope of the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT), except for the transactions with associated enterprises in third countries. / 2. This Directive shall cease to apply as of 1 January 2040 for all MNE groups operating in the Union, except for the transactions with associated enterprises in third countries. / 3. Paragraph 1 shall apply only if the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT) enters into force before 2035 .

AddedArticle 18 – paragraph 2: 2. The delegation of power referred to in Article 3, second subparagraph, Article 13 and Article 14(2), (2a) and (2b) may be revoked at any time by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of the delegated act if already in force.

RemovedArticle 20 – paragraph 1 – subparagraph 1: 1. Member States shall adopt and publish, by [31 December 2024] at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.

AddedArticle 18 – paragraph 3: 3. Before adopting the delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Inter-institutional Agreement on better law making of 13 April 2016. The European Forum on Transfer Pricing referred to in Article 14a shall serve as the relevant expert body.

AddedArticle 19 – paragraph 1 a (new): The European Parliament may attend as an observer the international negotiations on Transfer Pricing Guidelines in the relevant international fora.

AddedArticle 19 a (new): Article 19a / Review / The Commission shall review the application of this Directive for MNE groups that fall under the scope of the proposal for a Council Directive on Business in Europe: Framework for Income Taxation (BEFIT), once that Directive enters into force.

AddedArticle 19b (new): Article 19b / Amendment to Directive 2011/16/EU / In Directive 2011/16/EU, point (i) of Article 8a(6) is replaced by the following: / ‘(i) the identification of the method used for determination of the transfer pricing or other valuation methods and techniques to estimate the arm’s length price as defined in Article 9 of Directive [2024/XX/XX on transfer pricing], and the reasoning behind applying such method, or the transfer price itself in the case of an advance pricing arrangement;’

AddedArticle 20 – paragraph 1 – subparagraph 1: Member States shall adopt and publish, by [31 December 2024] at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.

Article 20 – paragraph 1 – subparagraph 2: They shall apply those provisions from [1 January 2025].