On September 12^th, 2023, the European Commission presented a Directive Proposal on Transfer Pricing (TP Directive Proposal) alongside the BEFIT Proposal. The TP Directive Proposal aims to integrate vital transfer pricing principles into EU law, seeking common approaches among member states. Addressing the absence of harmonized rules, the proposal aims to reduce member states’ discretion in interpreting the OECD Transfer Pricing Guidelines (OECD TPG), addressing challenges like profit shifting, tax avoidance, litigation, double taxation, and high compliance costs. The proposal intends to embed the arm’s length principle (ALP) and key transfer pricing rules into EU law, introduce a fast-track procedure for double taxation resolution, clarify the role of the OECD TPG, and explore the possibility of establishing common binding rules for specific transactions.