BDO Transfer Pricing News

Issue 56 - September 2026

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This issue of Transfer Pricing News highlights recent developments that reflect the continued evolution of transfer pricing rules, guidance, case law and compliance obligations across Africa, Asia and Europe. Although the articles address different jurisdictions and fact patterns, they point to a common direction: tax authorities and courts are looking beyond whether intercompany arrangements are grounded in substance, contemporaneous facts and a commercially realistic application of the arm’s length principle. The developments covered fall into three broad categories: expanded domestic transfer pricing reach, updated administrative guidance and documentation requirements, and court decisions testing how the arm’s length principle applies in commercial settings such as guarantees and distressed financing.

• Italy: The Supreme Court has ruled on free intragroup guarantees, addressing whether a group company should be remunerated for providing financial support. 
• Luxembourg: The Administrative Court has provided welcome guidance on distressed financing arrangements, confirming that amendments, waivers or restructurings should be assessed based on the commercial circumstances at the time the decision is made.
• Malta: New guidance focuses on when a legacy arrangement may be considered “materially altered” for purposes of determining when the transfer pricing rules begin to apply.
• South Africa: A proposal would extend arm’s length pricing to certain domestic transactions involving companies in special economic zones. 
• Vietnam: Changes to transfer pricing compliance rules include a higher documentation exemption threshold, a benchmarking hierarchy and updated CbCR filing and notification requirements. 

These legislative, administrative and judicial developments illustrate that transfer pricing compliance continues to require more than technical adherence to rules. Taxpayers should be prepared to demonstrate that related-party arrangements reflect commercial substance, are supported by contemporaneous evidence and remain appropriate as business circumstances, local guidance and judicial expectations evolve.

Read more about the news on the website → BDO Global

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Source: BDO Global