If you read during the week an editorial written by a well-known name here in Romania, not only by economists but also by the general public, you already know that "transfer-pricing practices (of profit export through manipulated transfer prices) are more detrimental for the host country in time of crisis."

And if you heard the Minister of Finance’s statements you also know that upgrading IRS’s department of transfer pricing is a priority. "I’m not saying that such operations are illegal, but we must be careful that profits of multinationals are being distributed in a fair way for the Romanian state too." 

The Brexit vote result will change, if it hadn’t already started to, the way in which the EU will approach the most controversial topics – among which, the highly politicized issue of trans-European taxation, where transfer pricing and profit allocation are the key words. The two parties’ position regards after all, the profit allocation – the winners are those who have claimed that UK is losing rather than winning, from being a part of the EU.

I wrote this article on Friday, 24th of June. Naturally, I was impressed not only by the vote results but also by the picture posted on this very morning on the EU website – the picture’s unintentional irony reminds us that we live in a Union which seems to be stuck in the middle of its very own project, overwhelmed by the real life struggles.

The EU sinks its tax fangs into America's Apple and demands 13 billion dollars 'owed' to Europe. A harsh warning of intolerance to tax arrangements without Brussels' OK. The US grinds its teeth equally harshly, and brutally displays its own intolerance to anyone who might bite into the taxes 'owed' to Uncle Sam. Their warning - hands off our transfer pricing agreements! Do not undermine the (already frail) progress of the BEPS towards reforming international taxation and increasing its transparency.

The whole tax reform under work nowadays in Brussels is centered on the reformulation of the concept of tax advantage on a national level that does not cause damage on a European level.
Which brings us to the intragroup transactions and of their prices - the so-called transfer prices, which the Tax Administration wants at market levels; well, in the new context, it's no longer the field of national tax administration, but of the EU's, plain and clear.

“SA. 38945” could have been just another case about the tax rulings (issued by Luxembourg or other) found unlawful by European Commission. As it was “SA. 38375” (Luxembourg-Fiat Finance), or “SA. 38944” (Luxembourg-Amazon), or “SA. 44888” (Luxembourg-Engie) or the other “ad hoc state aid (S.A.) cases regarding tax base reduction”. But not this time – ”SA. 38945 is a State Aid granted by Luxembourg to McDonald’s, but do not infringe EU rules”. (the press release, here)