EU Directive on Transfer Pricing

The EU Directive on Transfer Pricing sets rules for how multinational companies should price transactions between their affiliated entities across different EU countries. Its goal is to ensure that these transactions reflect fair market values, preventing profit shifting to minimize taxes. This helps ensure companies pay their fair share of taxes in each country they operate in, contributing to fair competition and public finances. The directive provides guidance on documentation and methods to determine appropriate transfer prices, promoting transparency and compliance within the EU.