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As indicated in last year’s coalition programme, the 2015 tax budget, which the Luxembourg Government presented on 15 October 2014, includes provisions that further formalise legislation on transfer pricing. The draft law clearly restates the arm’s length principle, confirms that further legislation is to be introduced through a subsidiary Grand-Ducal Regulation, and makes more explicit the need for transfer pricing documentation.
The long arm of the law
Transfer pricing, which can be an important factor in determining the allocation of profits between parts of a multinational corporation, has for many years been the cause of disputes between tax authorities and businesses that operate across national borders. The OECD has striven over the last five...
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