Some transfer pricing aspects of cross-border banking activities

Abstract

The article explains the state of affairs regarding transfer pricing in the financial sector within Europe. More particularly, it focuses on some relevant trends which are of particular importance for banks in Europe. After briefly explaining the so-called ‘arm’s length principle’, the article focuses on transfer pricing documentation rules. Because various member states have recently implemented different documentation rules, the European Commission has adopted the European Union Transfer Pricing Documentation concept, in order to streamline the differing requirements. This European Union concept is explained in the article. Furthermore, this article discussed the OECD Transfer Pricing Guidelines and other OECD publications covering the transfer pricing aspects of the attribution of profits to permanent establishments and the business restructuring. In the conclusion, the authors give their view on some trends that can be discerned from these documents.