BDO Transfer Pricing News - Issue 54

Introduction

Budget season 2026 is well under way, and not surprisingly, some jurisdictions are using the opportunity to overhaul their transfer pricing regimes. Canada is perhaps the best example of this trend, as it is now in the process of enacting major changes to its transfer pricing legislation, the most significant transformation since the current rules were introduced in 1997.

India’s transfer pricing regime, now over two decades old, is also undergoing a transformation thanks to a package of reforms introduced in the 2026 budget. The proposed reforms include a modernised safe harbour regime for the IT sector and a revamped advance pricing agreement programme.

The UK also updated its transfer pricing guidance recently, introducing two new sections that signal HMRC’s continued push for a move away from high-level reports and towards documentation that is underpinned by sufficient primary evidence and data.

Transfer pricing regimes never seem to be fully final, and countries continue to fine-tune their rules as taxpayer practices evolve. Georgia, for example, just introduced an amendment to require companies to submit a declaration disclosing its international controlled transactions if the total amount of those transactions exceeds GEL 500,000 within a calendar year. The United Arab Emirates, for its part, recently released a corporate tax guide on advance pricing agreements that sets out the framework for entering into APAs in the UAE.

Transfer pricing compliance has become a critical matter for Spanish groups with a presence in Latin America, and in this issue we offer a quick reminder of upcoming deadlines that Spanish multinationals should keep on their radar to ensure timely transfer pricing compliance in Latin America.

Court cases are a major factor in shaping a jurisdiction’s transfer pricing regime. In this issue, we cover a recent decision by Colombia’s highest court on tax matters upholding the tax authorities’ rejection of deductions related to intercompany services when the taxpayer failed to sufficiently demonstrate the provision of the services, and the EU’s Advocate-General decision addressing the VAT implications of a transfer pricing adjustment.

Transfer pricing adjustments may also have Pillar Two implications. For example, transfer pricing adjustments can find their way into the local statutory accounts of the transaction year, but may appear in the consolidated accounts only in the subsequent year. The Pillar Two implications are discussed in our article in this issue.