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Report on the 2025 WU Global Transfer Pricing Conference
Transfer Pricing Developments Around the World
The WU Transfer Pricing Center at the Institute for Austrian and International Tax Law at WU (Vienna University of Economics and Business) hosted its annual Global Transfer Pricing Conference from February 19th to February 21st, 2025. As in the previous years, the conference was dedicated to global developments as well as topical issues in transfer pricing. The two-day conference was attended by over 160 participants from 45 countries, with all key players in the field - such as representatives of international organisations (OECD, UN, and EU), multinational enterprises, governments, advisory, and academia - participating in the conference. The conference focused on international and regional developments in the field of transfer pricing as well as current developments in specific subject areas, such as recent case law, the simplified and streamlined approach (also known as “Amount B”), global mobility, cooperative compliance, intra-group losses, and new technologies. The conference was divided into eight sessions. At the beginning of each session, current developments in the respective topic area were presented by a keynote speaker. This was followed by a panel discussion, during which conference participants from the audience were also able to share their views on the topics. The specific manuscripts that formed the basis of the individual sessions will be published in a book later this year.
This report provides an overview of the content and key discussion points of the eight sessions.
Session 1: Global Transfer Pricing Developments
This session looked at the transfer pricing developments at the level of international organisations, that is, OECD, UN, and EU, as well as developments from selected jurisdictions. The members of the panel underscored the agenda of the various international organisations. For the OECD, it was reported that there was progress on Amount A of Pillar I. One of the challenges to the conclusion of Amount A was a technical issue on whether Amount A and Amount B would be implemented as a package. The conclusion of Amount B was reported to be a priority on the OECD agenda, including a plan to roll out tools to support training and implementation in various countries.
At the UN, the UN Tax Committee is set to complete its current mandate in March 2025. New membership of the UN Tax Committee will be appointed in the summer of 2025. A panel member gave an update on the UN Framework Convention on International Tax Cooperation (UN Framework Convention). Negotiation on the UN Framework Convention is underway, alongside two protocols, one on taxation of services and another on dispute resolution. Regarding the inclusion of transfer pricing issues in the UN Framework Convention, a member of the panel emphasised that there was no final determination on the matter. The UN Tax Committee finalised its work on a new article on the treatment of services which consolidates all the articles on services in the UN Model Tax Convention and removes thresholds as a requirement for determination of taxing rights. The challenges posed by the new article on the treatment of service were highlighted by the business community such as the gross basis of taxation that may result in over-taxation. The panel highlighted the need for other bodies to partner with the UN Tax Committee to generate ideas that are beneficial to all countries.
At the EU level, the panel discussed initiatives such as the proposal for an EU Transfer S. 13 Pricing Directive. The Transfer Pricing Directive enlisted a dialogue about the reasons for the limited support towards EU hard law on transfer pricing. The panel also mentioned that the proposal for the directive amending the directive on administrative cooperation in the field of taxation was close to adoption.
Session 2: Transfer Pricing and Recent Case Law
The second session considered selected cases on transfer pricing. The cases were divided into four broad themes: profit attribution to permanent establishments, dispute prevention, intra-group services, and intra-group financing. There was a debate about the Apple case on state aid where panellists discussed their views on the outcomes of the case. In the end, it was agreed that state aid cases resulting from advance pricing agreements (APAs) undermine tax certainty within the EU. One of the panellists suggested that summary renewal of APAs could improve dispute prevention in transfer pricing.
Regarding the treatment of intra-group services, the bundling of services was noted as a challenge for tax authorities in developing countries. The panel also discussed the difficulties in the application of the benefits test where the evidence of the benefit is considered insufficient in many countries, leading to adjustments in these countries. On the value of transfer pricing cases beyond the jurisdictions in which they are decided, the panel agreed that cases in one country are often considered by judges in other jurisdictions. This is the case even in civil law countries where the doctrine of precedent does not apply.
Session 3: Transfer Pricing and the Simplified and Streamlined Approach
The panel looked at the history of Amount B (now referred to as the simplified and streamlined approach) which stemmed from the need for a simplified application of the arm’s length principle to routine distributors. One member of the panel noted that, prior to the simplified and streamlined approach proposal, a few countries agreed that they could apply a predetermined profit margin to routine distributors. This was driven by the recognition that it was impractical to spend significant resources on compliance relating to routine distributors. It was observed that the simplified and streamlined approach would benefit from mass adoption by countries. Among the considerations for the adoption of the simplified and streamlined approach in its current form was the need to balance between simplification and a result that was as close as possible to an arm’s length outcome.
The panel noted that one of the challenges to implementation of Amount B is the potential use of the outcomes of Amount B as a baseline for negotiations between countries in bilateral relations such as MAPs. This would limit the possibility to negotiate an amount that is less than Amount B even where such a lower amount is feasible. Moreover, the panel and members of the audience mentioned that Amount B was also driven by the business community that would like to reduce the resources spent on transfer pricing compliance involving routine distributors.
Session 4: Transfer Pricing and Global Mobility
The discussion on transfer pricing and global mobility focused on the transfer pricing analysis arising from the movement of personnel that contributes to the non-routine profits of a company and the PE issues that may arise from such movements. A panel member noted that the OECD has started having dialogues on global mobility. The creation of PEs that do not quality for attribution of profits was identified as a concern that would result in an undue administrative burden. It was suggested that if personnel moved to another country for personal reasons, this should not trigger transfer pricing issues. Global mobility was identified as a very significant issue in the EU due to the fundamental freedom regarding movement of people. A member of the panel proposed a 60-day safe habour rule where movement would not affect the transfer pricing analysis of entities. It was concluded that businesses need clear and predictable rules relating to global mobility to foster certainty.
Session 5: Transfer Pricing and Cooperative Compliance
The fifth session dealt with cooperative compliance and its challenges in transfer pricing. Given the cross-border nature of transfer pricing, international businesses of any size have to deal with multiple transfer pricing rules from different jurisdictions. Against this background, the European Commission has already published guidelines for a pilot project on cooperative compliance within the EU, focusing specifically on transfer pricing risks for large multinational enterprises. In addition, the OECD provided S. 14 the International Compliance Assurance Programme (ICAP), which is a voluntary risk assessment and assurance programme to facilitate open and cooperative multilateral engagements between multinational enterprises willing to engage actively and transparently.
In principle, the panel discussion contained different ways of a tax control framework. Accordingly, the panel discussed that cooperative compliance may be used as a useful tool available to both multinational enterprises and tax administrations based on a collaborative approach and pro-active relationship that can for instance be used when taxpayers are faced with an audit. However, the panel stated that cooperative compliance should not be mixed with advance pricing arrangements (unilateral, bilateral, or multilateral) or rulings. The latter provide the taxpayer with legal certainty that the tax administration will respect the approach described in the advance pricing arrangements upon condition that the transaction or operation is executed as described. However, such instruments are often lengthy and can even be performed several years after the facts. Accordingly, there is a need for cooperative compliance. However, cooperative compliance does not guarantee legal certainty, rather it should serve comfort and assurance to the taxpayer that the tax administration will consider the covered tax risk under cooperative compliance as low. In addition, it was emphasised that cooperative compliance can only work if transparency and mutual trust on both sides (i.e. taxpayer and tax administration) are given. Notwithstanding the availability of mutual agreement procedures, advance pricing arrangements or even joint or simultaneous audits, cooperative compliance has a good reason to exist and the potential to become a mainstream tool taxpayers can rely on. In the end, the panel assumed how cost-efficient cooperative compliance measures in the future could look like.
Session 6: Transfer Pricing and the Extractive Industry
The sixth session covered enterprises operating in the extractive industry. Such enterprises are globally engaged and provide a significant contribution to the economies of many developing countries. As the amount of corporate income taxes raised in the mining sector is generally based on the value of the commodity being traded, it is critically decisive that such transactions are valued correctly. Both the OECD and the United Nations are working on the challenges faced in the extractive industry. To this end, in 2018, the United Nations published its handbook on selected issues for taxation of the extractive industries by developing countries that summarises the broader unique economic challenges faced by the extractive industry. Further, these unique characteristics of the industry are also recognised by the OECD. The Secretariat of the OECD released a public consultation document regarding the extractive’s exclusion under Amount A for Pillar I of the OECD.
In the beginning, the panel dealt with the challenges in the extractive industry and emphasised that the extractive industry can be considered as unique due to its work with non-renewable assets that are owned by source countries. However, profits gained from such assets are often allocated in other jurisdictions, where the key management functions as well as roles relating to purchase, sales, and marketing efforts are located. Another key area of interest is when extractive companies establish central intellectual property ownership or centralise technical support and recharge such as royalties and/or service fees to source countries. Apart from challenges in the extractive industry, the panel discussed the application of price methods to intra-group transactions involving non-renewable assets considering that determining an arm‘s length remuneration for such materials can be challenging. Finally, the panel mentioned some general interest areas with respect to permanent establishments that also exist in the world of the extractive industry.
Session 7: Transfer Pricing and Intra-Group Losses
The seventh panel on the last day of the conference dealt with intra-group losses in the world of transfer pricing. In particular, the application of the arm‘s length principle, the maintenance of sufficient documentation, and the handling of functional analyses can be complex when dealing with intra-group losses.
In the beginning of the session, the panel members were discussing the common occurrence of losses, including business examples from practice that are causing losses. Subsequently, the importance of risk as well as transfer pricing methods and the allocation of losses including issues with respect to Amount B were addressed. To this end, it was considered that risk analysis and comparable identification including timing are crucial elements when applying the transfer pricing methods. Furthermore, the impact of Amount B, which is an OECD led initiative trying to simplify and streamline the application of the arm’s length principle to in-country baseline S. 15 marketing and distribution activities, was part of the discussion. In this regard, the question was raised whether an entity applying Amount B in a given year could incur a loss in a future period. This issue is based on the fact that the standardised pricing methodology included in Amount B does not provide that an entity could incur a loss, setting the lowest return an entity could achieve under the standard pricing matrix at a return on sales of 1.50 %. Finally, the panel debated on certain issues on losses in the context of Pillar II. To this end, the panel concluded that transfer pricing adjustments will impact the Pillar II computations (e.g. adjustment of income in a loss-making jurisdiction could create top-up tax exposure in a future period).
Session 8: Transfer Pricing and New Technologies
The topic of the last session included new technologies in the field of transfer pricing. In general, artificial intelligence has already accessed several areas of tax law, and it is also reshaping transfer pricing solutions for taxpayers and tax administrations.
First, this panel dealt with the question of how new technology can be used within tax audits and what role data security plays when using new technologies in tax matters. Following this, the panel discussed the use of artificial intelligence, where the question was raised whether artificial intelligence may help in tax matters including transfer pricing, provided that it is used correctly. Otherwise, artificial intelligence will neither help tax administrations nor taxpayers for their purposes. Finally, the panel tried to take a look into the crystal ball in order to assume where new technology including artificial intelligence may help in the future in order to deal with complex tax matters such as transfer pricing.
The 10th annual Transfer Pricing Conference, organised by the WU Transfer Pricing Center, brought together key stakeholders in the field of transfer pricing to engage in discussions on the latest developments in the area. The conference facilitated discourse on the activities of international organisations, recent case law, and various emerging issues in transfer pricing. The participants explored important topics such as the treatment of losses and transfer pricing considerations within the extractive industries. By fostering dialogue among various experts, the conference contributed to a deeper understanding of contemporary transfer pricing challenges and potential solutions to the same.
Save the Date:
The 2026 WU Global Transfer Pricing Conference is scheduled to take place from February 15th to February 17th, 2026.
