EC - Transfer pricing issues concerning SMEs, cost contribution arrangements 

• The transfer pricing challenges faced by small and medium enterprises (SMEs)
• Cost contribution arrangements (CCAs) on services not creating intangible property

Read the report: COM(2012) 516 [PDF 115 KB]

In sending the report on to the European Parliament, Council, and European Economic and Social Committee, the EC invites the EU Member States to implement the recommendations contained in the report into their national law or administrative rules.

SMEs

Concerning SMEs, Appendix I of the report:

• Provides various recommendations for a more uniform way to consider the specific requirements for SMEs in the context of transfer pricing
• Contains best practices and recommended guidelines
• Recognizes SMEs’ particular needs concerning compliance with transfer pricing rules

CCAs on services not creating intangible property

Concerning cost contribution arrangements (CCAs), Appendix II of the report:

• Describes what constitutes CCAs and the general features when a CCA is consistent with the arm’s length principle
• Emphasizes how most expediently a reviewer can conclude that the arm’s length price has been applied to CCAs on services not creating intangible property
• Addresses certain aspects more specifically—e.g., the expected benefit test, allocation keys to determine each participant’s contribution, ways to measure contributions-in-kind, the treatment of situations when costs referred to are those budgeted (rather than those actually incurred), and possible application of accounting standards generally used throughout the group
• Provides a summary in question-and-answer format as to the current status of the EU Member States’ CCA laws, administrative guidance, and best practices

Contact a tax professional with KPMG's Global Transfer Pricing Services.

For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services group:

Dirk Van Stappen

+32 3 821 19 18