Mark Schuette
Chair - Global Transfer Pricing Centre of Excellence, BDO USA
Introduction
The interaction between customs and transfer pricing has been a perennial issue for transfer pricing practitioners, but in 2025, given the heightened interest in tariffs, the issue has gained urgency and brought transfer pricing to the fore. In this issue of BDO’s Global TP News, we include a Canadian article on the customs/transfer pricing interplay, which notes that artificially lowering transfer prices to minimise tariff liabilities may trigger regulatory investigations and result in tax reassessments by the relevant authorities. The EU Court of Justice recently issued a landmark ruling on this topic, offering much needed clarity on customs valuation processes in relation to complex price adjustments in cross-border transactions.
Another evergreen issue in the transfer pricing world is the question of what constitutes an arm’s length amount of debt. The Australian Taxation Office recently published guidance on this topic, which adopts a “risk zone” approach with a range of colour-coded risk outcomes. Georgia is also grappling with this issue, and recently introduced regulations governing the proper delineation of controlled loan transactions. Germany, which has had intra-group financing rules in place for some time, recently introduced comprehensive changes to the regime.
Georgia also has introduced legislation making country-by-county (CbC) reporting an obligation effective for the 2025 fiscal year. CbC reporting obligations have been in place for some years now, but the reports have become more significant because of the role they play in determining whether a multinational entity is eligible for Pillar Two safe harbors. In an effort to improve the quality of CbC reports, the OECD recently published a list of common errors MNE groups make when preparing these reports.
In a related development, Germany has introduced a public country-by-country reporting requirement, which applies to fiscal years beginning after 21 June 2024.
We round out our issue with two articles on new transfer pricing legislation – one from Denmark, and the other one from the UK.
Mark Schuette