Insights

On the 12th of September 2023, the European Commission introduced the BEFIT initiative, also referred to as "the Proposal.". This initiative acknowledges the discretionary interpretations and implementations of the principle-based OECD Transfer Pricing Guidelines by Member States, resulting in tax uncertainty, escalated compliance costs, legal disputes, and associated fees. Together, these constitute a high risk for double and over-taxation for cross-border businesses and, therefore, act as a barrier within the Single Market. Accordingly, the Proposal aims to harmonize transfer pricing rules across EU Member States by incorporating the arm’s length principle into EU law.

On the 30th of December 2020, the EU and China have concluded in principle the negotiations for a Comprehensive Agreement on Investment (CAI). This agreement will create a better balance in the EU-China trade relations and, in our view, create even more opportunities in the future for foreign direct investment (FDI) between the EU and China.