New guidelines by the EU Commission are to avoid lawsuits in the context of so-called “Advance Pricing Agreements” (APA). These agreements are made between the fiscal authorities of EU member states. They determine whether and where cross-border business operations are to be taxed. In the opinion of the Commission APAs are a suitable tool in order to increase legal certainty for internationally operating companies and decrease their fiscal burdens.
The new guidelines are to ensure that affiliated companies apply the right taxable base in those countries in which they operate in cross-border transactions. These guidelines contain several explanations, provide solutions to specific individual cases and case studies. So far different rules by member states on transfer prices could possibly lead to inconsistencies in the EU single market. Thus, it happened that one and the same income was taxed twice or in other words that so-called double taxation occurred.
Further information on the subject is available on the internet. 