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Joint Transfer Pricing Forum

The EU Joint Transfer Pricing Forum (JTPF) assists and advises the European Commission on transfer pricing tax matters.

 What's new?

April 2014

  • The JTPF published Transfer Pricing Profiles of all EU Member States which contain information about domestic transfer pricing frameworks, Competent Authorities’ contact details and other useful information for taxpayers and tax authorities.

January 2014

  • The JTPF adopted a Report on Compensating Adjustmentspdf(62 kB) Choose translations of the previous link  . MS have different practices with respect to compensating adjustments and the report provides practical guidance on avoiding double taxation and double non-taxation in the application of compensating adjustments in spite of the different practices of MS. The guidance is applicable to compensating adjustments which are made in the taxpayer’s accounts and explained in the taxpayer’s transfer pricing documentation.

June 2013

  • The JTPF adopted a Report on Transfer Pricing Risk Managementpdf(178 kB) Choose translations of the previous link  . The report recognises the need for tax administrations and taxpayers to allocate their transfer pricing resources effectively. It makes recommendations on managing transfer pricing risk in each of the three phases of examining a transfer pricing file. The report also contains an example of a work plan for a transfer pricing audit.

April 2013

January 2013

  • The JTPF adopted a Report on Secondary Adjustmentspdf(52 kB) Choose translations of the previous link  . The report addresses the issue of secondary adjustments in general and puts it in the context of the EU Parent Subsidiary Directive. It includes several recommendations aiming to avoid double taxation and to solve disputes.
 

 Background

2012

December - In its Conclusions from 4 Decemberpdf, the Council of the European Union welcomed the Commission Communication on the work of the EU Joint Transfer Pricing Forum in the period July 2010 to June 2012 and the Reports on Small and Medium Enterprises and Transfer Pricing and on Cost Contribution Arrangements on Services not creating Intangible Property (IP).

September - On 19 September the Commission adopted a Communication on the work of the EU Joint Transfer Pricing Forumpdf Choose translations of the previous link  in the period July 2010 to June 2012 and related proposals:

  • Report on Small and Medium Enterprises and Transfer Pricing and
  • Report on Cost Contribution Arrangements on services not creating Intangible Property (IP).

June - On 7 June the Forum adopted a Report on Cost Contribution Arrangements on Services not creating Intangible Property (IP). pdf Choose translations of the previous link  The report elaborates on the different concepts underlying Cost Contribution Arrangements (CCAs) on services and Intra Group Services (IGS). It describes the general features for determining whether the arm's length principle has been applied to CCAs on services not creating IP and gives concrete recommendations to achieve a uniform treatment within the EU.

2011

May - In its Conclusions from 17 Maypdf, the Council of the European Union welcomed the Commission Communication on the work of the EU Joint Transfer Pricing Forum from April 2009 to June 2010pdf Choose translations of the previous link  , endorsed the related guidelines on low-value-adding intra-group services and welcomed the report on potential approaches to non-EU triangular cases. In its Conclusions from 17 May the Council also welcomed the Commission Decision of 25 January 2011 setting up the EU Joint Transfer Pricing Forum expert group pdf.

April  - 16 new private- sector members and the chairperson of the JTPF were appointed.

March  - The Forum adopted the Report on Small and Medium Enterprises and Transfer Pricingpdf Choose translations of the previous link  , which examines challenges faced by SMEs and offers concrete recommendations.

January

2006

The JTPF was formally established by Decision 2007/75/EC setting up an expert group on transfer pricingpdf, which expired on 31 March 2011.

2002

June - The JTPF was informally set up as a follow-up to Staff working paper SEC(2001) 1681 on company taxation in the internal market and Communication 2001/582pdf Choose translations of the previous link  "Towards an Internal Market without tax obstacles – A strategy for providing companies with a consolidated corporate tax base for their EU-wide activities".

October - The JTPF met for the first time.

 

 Operation

The JTPF works within the framework of the OECD Transfer Pricing Guidelines and operates on the basis of consensus to propose to the Commission pragmatic, non-legislative solutions to practical problems posed by transfer pricing practices in the EU.

The work of the JTPF is divided into 2 main areas:

  • the Arbitration Convention (AC) - a specific dispute resolution mechanism for transfer pricing cases
  • other transfer pricing issues identified by the JTPF and included in its work programme.
 

 Members and Profiles

1. JTPF composition

The JTPF has 1 representative from each Member State and 16 non-government members and is chaired by an independent chairperson.

Representatives from candidate countries (FYR Macedonia, Iceland, Montenegro and Turkey) and from the OECD may be invited to the JTPF as observers.

Names and CVs of the chairperson and non-government members of the JTPF:

Chair

Bruno GIBERTpdf(21 kB)

Non-government members

Jesper BARENFELDpdf(8 kB)

Gaby BESpdf(376 kB)

Andrea BONZANOpdf(13 kB)

Brian CHAPMANpdf(8 kB)

Irina DOBREpdf(91 kB)

Iwona GEORGIJEWpdf(61 kB)

Eduardo GRACIApdf(32 kB)

Lari HINTSANENpdf(14 kB)

Guy A. KERSCHpdf(163 kB)

Alan MCLEANpdf(7 kB)

Astrid PIERONpdf(79 kB)

Michael RICHTERpdf(18 kB)

Monique VAN HERKSENpdf(87 kB)

Dirk VAN STAPPENpdf(27 kB)

Isabel VERLINDENpdf(76 kB)

 

2. Member States’ Transfer Pricing Profiles

Austriapdf(83 kB)Germany
(available soon)
Netherlandspdf(209 kB)
   
Belgiumpdf(162 kB)Greecepdf(85 kB)Polandpdf(121 kB)
   
Bulgariapdf(80 kB)Hungarypdf(90 kB)Portugalpdf(94 kB)
   
Croatiapdf(167 kB)Irelandpdf(86 kB)Romaniapdf(111 kB)
   
Cypruspdf(75 kB)Italypdf(116 kB)Slovakiapdf(89 kB)
   
Czech Republicpdf(87 kB)Latviapdf(177 kB)Sloveniapdf(92 kB)
   
Denmarkpdf(88 kB)Lithuaniapdf(95 kB)Spainpdf(202 kB)
   
Estoniapdf(96 kB)Luxembourgpdf(82 kB)Swedenpdf(82 kB)
   
Finlandpdf(81 kB)Maltapdf(75 kB)United Kingdompdf(81 kB)
   
  
France
(available soon)
  
   

 

3. Member States' Statistics

The JTPF monitors regularly the number of pending Mutual Agreement Procedures (MAPs) under the Arbitration Convention. Data is collected from MS on an annual basis after year end. The latest statistics are published below.

Statistics on pending MAPs under the Arbitration Convention at the end of 2012pdf(198 kB) Choose translations of the previous link 

 

 

 Achievements

1. Code of conduct for the effective implementation of the AC

On 23 April 2004, the Commission adopted Communication 2004/297 on the work of the JTPF in business taxation (October 2002 - December 2003) and on a code of conduct for the effective implementation of the Arbitration Convention . On 7 December 2004 the Council adopted the proposed code of conduct.

The Code of Conduct applies in cases where an EU Member State's tax administration increases the taxable profits of a company from its cross-border intra-group transactions, for example by making a transfer pricing adjustment.

It ensures a more effective and uniform application by all Member States of the 1990 (Arbitration Convention 90/436/EEC) by establishing common procedures concerning:

  • the starting point of the 3 year period which is the deadline for a company suffering double taxation to present its case to the relevant Member State's tax administration
  • the starting point of the 2 year period during which Member States' tax administrations must attempt to reach an agreement that eliminates the double taxation that is the subject of the complaint
  • the arrangements to be followed during this mutual agreement procedure (the practical operation of the procedure, transparency and taxpayer participation)
  • the practical arrangements for the 2nd phase of the dispute resolution procedure provided for in the AC that must follow if there is no mutual agreement between the tax authorities within 2 years (i.e. the establishment and functioning of the advisory commission that must then arbitrate in the case).

The Code contains a recommendation to EU Member States to suspend tax collection during cross-border dispute resolution procedures. It also recommends that Member States should extend those rules to double tax conventions between EU Member States.

Revised code of conduct

On 14 September 2009, the Commission adopted Communication 2009/472 on the work of the JTPF from March 2007 to March 2009 and a related proposal for a revised code of conduct for the effective implementation of the Arbitration Convention. On 22 December 2009, the Council adopted the proposal.

The revised Code of Conduct is the result of a monitoring exercise carried out by the JTPF to improve the functioning of the AC by providing common interpretations on the following topics:

  • serious penalties
  • scope of the AC (triangular transfer pricing and thin capitalisation cases)
  • interest charged/credited by tax administrations when a case is dealt with under the AC
  • functioning of the AC (as regards rules about the deadline for the setting-up of the Advisory Commission and criteria for establishing the independence of arbitrators)
  • the date from which a case is admissible under the AC and the inter-action of the AC and domestic litigation.

Key documents:

2. Code of conduct on transfer pricing documentation for associated enterprises in the EU

On 27th June 2006, the Council adopted a Code of Conduct on transfer pricing documentation for associated enterprises in the European Union (EUTPD). This was part of a Communication of the European Commission adopted on 10 November 2005.

The Code of Conduct aims to standardise the documentation that multinationals must provide to tax authorities on their pricing of cross-border intra-group transactions ('transfer pricing' documentation).

The Code, that was developed on the basis of work in the JTPF (IP/02/1105 Choose translations of the previous link  ). It aims to reduce significantly the tax complications that companies face when trading with associated enterprises in other Member States. Companies frequently complain about the onerous and divergent documentation obligations with which they have to comply in such cases in the different Member States involved.

The Code is a political commitment. It will not affect Member States' rights and obligations or the respective spheres of competence of the Member States and the EU.

Key documents:

3. Guidelines for Advance Pricing Agreements (APAs) in the EU

The Commission on 26th February 2007 adopted a Communication on the work of the Joint Transfer Pricing Forum (hereafter: JTPF) in the field of dispute avoidance and resolution procedures including guidelines for Advance Pricing Agreements (APAs) within the EU.

The Communication is the third outcome achieved since the JTPF was set up in October 2002, and the proposed guidelines are based on the best practices identified by the JTPF in its report.

The Guidelines aim to prevent transfer pricing disputes and associated double taxation from arising in the first place by laying down how an efficient APA process should work.

An APA will provide in advance certainty concerning the transfer pricing methodology and therefore simplify or prevent costly and time-consuming tax examinations into the transactions included in the APA. This should lead to savings for all parties involved, cut compliance costs and provide more consistency in transfer pricing within the EU. This approach will reduce tax obstacles to cross-border economic activities in the internal market.

The Guidelines set out the framework for the overall procedure and provide details of how some specific problems could be resolved. They also provide examples of the necessary time frame and the types of areas which would need to be covered by the APA.

On 5 June 2007 the Council "welcomed the Commission Communication on the work of the Joint Transfer Pricing Forum in the field of dispute avoidance and resolution procedures including guidelines for Advance Pricing Agreements within the EU. The Council noted the commitment of Member States to follow the Guidelines and to implement them in their national administrative practices as far as legally possible".

Key documents:

4. Guidelines on low-value-adding intra-group services

On 25 January 2011 the Commission adopted Communication 2011/16 on the work of the JTPF from April 2009 to June 2010 including proposed guidelines on low-value-adding intra-group servicespdf(124 kB) Choose translations of the previous link  .

The guidelines:

  • provide a response to an increasing awareness that business and tax administrations' compliance resources (for auditing and dispute resolution) are taken up by what used to be a routine aspect of intra-group transactions.
  • put into context the nature of certain transactions (related to intra-group service provision) and propose appropriate (but less resource-intensive) approaches to evaluate these transactions against the internationally recognised arm's-length standard.
  • are based on certain principles: deductibility of all relevant costs subject to domestic law provisions; availability of relevant and reliable information; flexibility of the reviewer's approach.
  • address more specific areas such as shareholder costs, cost pools, allocation keys, etc.
5. Potential approaches to non-EU triangular cases

Communication 2011/16 pdf(124 kB) Choose translations of the previous link  also proposed potential approaches to non-EU triangular cases.

The Forum defined non-EU triangular cases as cases where 2 states in a Mutual Agreement Procedure cannot fully resolve any double taxation arising in a transfer pricing case when applying the arm's length principle, because an associated enterprise situated in a third state is identified as being the source of non-arm's-length results in a chain of relevant transactions or commercial/financial relations. Different approaches to resolving such disputes were suggested.

In addressing the issue of transfer pricing triangular cases, the Forum distinguished between cases where the third associated company is situated within or outside the EU. Cases where all associated enterprises are within the EU are covered by the provisions of the revised Code of Conduct on the Arbitration Convention (see above).

6. Report on Small and Medium Enterprises (SMEs) and Transfer Pricing

On 19 September 2012 the Commission adopted a Communication (COM/2012/516pdf Choose translations of the previous link  ) on the work of the EU Joint Transfer Pricing Forum in the period July 2010 to June 2012 including the Report on Small and Medium Enterprises and Transfer Pricing (SME Report) prepared by the JTPF. In its Conclusions of 4 December 2012pdf(78 kB) the Council of the EU welcomed the Commission Communication and the SME Report.

The Report examines the specific issues of SMEs in the field of transfer pricing and suggests how to address them in the form of a series of recommendations concerning areas such as access to information, training, documentation requirements, audit, existing best practices and dispute resolution.

Following the adoption of the SME Report EU Member States completed a questionnaire on SMEs and transfer pricing. Their responses contain information relevant for SMEs in tackling transfer pricing matters and are published below (in English, except for France; information for France is available in French only)

Austriapdf(53 kB)Germanypdf(60 kB)Netherlandspdf(60 kB)
   
Belgiumpdf(67 kB)Greecepdf(58 kB)Polandpdf(63 kB)
   
Bulgariapdf(57 kB)Hungarypdf(53 kB)Portugalpdf(57 kB)
   
Croatiapdf(64 kB)Irelandpdf(67 kB)Romaniapdf(61 kB)
   
Cypruspdf(52 kB)Italypdf(67 kB)Slovakiapdf(60 kB)
   
Czech Republicpdf(57 kB)Latviapdf(53 kB)Sloveniapdf(67 kB)
   
Denmarkpdf(60 kB)Lithuaniapdf(69 kB)Spainpdf(59 kB)
   
Estoniapdf(55 kB)Luxembourgpdf(55 kB)Swedenpdf(65 kB)
   
Finlandpdf(53 kB)Maltapdf(57 kB)United Kingdompdf(67 kB)
   
  
Francepdf(63 kB)  
   

 

7. Report on Cost Contribution Arrangements on Services not creating Intangible Property (IP)

On 19 September 2012 the Commission adopted a Communication (COM/2012/516pdf Choose translations of the previous link  ) on the work of the EU Joint Transfer Pricing Forum in the period July 2010 to June 2012 including the report on Cost Contribution Arrangements on services not creating Intangible Property (IP).

The report elaborates on the different concepts underlying Cost Contribution Arrangements (CCAs) on services and Intra Group Services (IGS). It describes the general features for determining whether the arm's length principle has been applied to CCAs on services not creating IP. The report provides a list of information items that should meet the requirements of most reviewers when determining whether a CCA can be regarded as arm's length and gives concrete recommendations to achieve a uniform treatment within the EU.

 Work programme

In June 2011 the JTPF adopted its 2011-2015 work programmepdf, which covers the following topics:

  • Cost Contribution Arrangements
  • Risk assessment
  • Compensating/year-end adjustments
  • Secondary adjustments
  • Monitoring of previous achievements.
 

Meetings

2014
meetingdate

39

06/03/2014

2013
meetingdate

38

05/11/2013

37

06/06/2013

36

14/02/2013

2012
meetingdate

35

25/10/2012

34

07/06/2012

33

08/03/2012

2011
meetingdate

32

26/10/2011

31

09/06/2011

30

10/02/2011

2010
meetingdate

29

26/10/2010

28

08/06/2010

27

04/02/2010

2009
meetingdate

26

27/10/2009

25

03/06/2009

24

24/03/2009

2008
meetingdate

23

27/11/2008

22

05/06/2008

21

21/02/2008

2007
meetingdate

20

23/10/2007

19

28/06/2007

2006
meetingdate

18

07/12/2006

17

14/09/2006

16

20/06/2006

15

21/03/2006

2005
2004
2003
2002
meetingdate

2

04/12/2002

1

03/10/2002