Transfer pricing rules and State aid law

This contribution addresses the interaction of State aid law with transfer pricing rules. A number of high-profile investigations into transfer pricing arrangements approved by Member States’ authorities, including for companies like Amazon, Apple, and Starbucks has sparked fierce debate over the existence of an EU principle of “arm’s length” taxation and its possible content. The chapter examines this debate and issues pertaining to the relationship between State aid law and double taxation treaties, justifications on the basis of providing double tax relief or protection from tax avoidance, and the scope of administrative discretion that State aid law needs to accord in a highly technical area of national law such as transfer pricing.