EU withdraws umbrella transfer pricing directive

Part of a broader deregulatory agenda

The withdrawal forms part of the EU’s 2026 Work Programme, which prioritises reducing administrative burdens, particularly for SMEs. In the same context, other tax initiatives such as the Unshell and DEBRA proposals were also discontinued, highlighting a strategic shift toward simplification rather than new regulation.

OECD guidelines remain the key reference

In practice, national legislation aligned with the OECD Transfer Pricing Guidelines remains the primary framework for transfer pricing compliance across the EU. While this avoids the complexity of a dual EU–OECD framework, differences in local interpretations may still give rise to disputes and double taxation risks.

A solid transfer pricing policy = more crucial than ever

The absence of EU-level harmonisation means that transfer pricing enforcement will continue to be driven by domestic law. As a result, local tax authorities retain significant discretion in interpreting and applying transfer pricing rules. Combined with an increase in transfer pricing audits and, in Belgium, stricter transfer pricing documentation requirements applicable from 2025 onwards, the need for a robust and well-documented transfer pricing policy has become even more critical.

How we support you

In this evolving environment, Vandelanotte supports its clients with the design, implementation and defense of sound transfer pricing policies, compliant documentation and effective risk management strategies. We are pleased to assist you in navigating increased scrutiny and maintaining compliance across jurisdictions.