Brussels, 08/12/2004 (Agence Europe) - On Tuesday, the Ecofin Council adopted a Code of Conduct, the aim of which is to remove double taxation in cross-border price transfer dossiers. Double taxation can occur when a Member State adjusts the taxable benefits of a company upwards, on the basis of its intra-group cross-border operations, and the Member State where the associated company is located neglects to readjust it back downwards accordingly.
This Code will help the dispute settlements system of transfer prices to run more smoothly, by guaranteeing a more uniform application of the European Union's arbitration agreement (90/436/EEC). The settlement of disputes has to take place over a period of three years, during which the recovery of tax debts is suspended.