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What impact will the pandemic have on transfer pricing rules?


March 15, 2022


For some decades now, companies established in several countries have implemented a transfer pricing policy and have documented this transfer pricing policy in order to justify their intra-group transactions.

The exceptional economic situation due to the health crisis has raised concreted issues regarding the application of transfer pricing rules.

A number of tax administrations have recently issued national instructions about the impact of the Covid-19 crisis. The OECD has also published a “Guide to the Transfer Pricing Implications of the Covid-19 Pandemic”.

Although the general principles of transfer pricing remain applicable, the publication of additional practical instructions was necessary to support their application during and following this crisis.

For example, the availability of information on “comparable third parties”, which is a key point for the application of transfer pricing rules, has been undermined in the pandemic context.

In addition, many companies are today have incurred losses throughout their value chain due to the pandemic crisis. For these companies, this is really important to determine how have to allocated between their related companies losses and costs specific to the Covid 19 crisis.

Public aid and State aid programs have been multiplied as a result of the pandemic. As a result, it is now necessary to examine in concrete terms the factors to be assessed in order to determine whether such aid has an impact, and to what extent, on a company’s transfer pricing policy.

Many companies are faced with situations of containment, plant shutdowns, supply chain breakdowns, and have been obliged to rethink their normal operations. Similarly, the introduction of teleworking may have led to a new distribution of value production within the subsidiaries of a group, sometimes even across borders.

In this context ABGI can offer you an evaluation and advice service :

  • Analyzing your flows and changes in revenue and costs following the COVID 19 crisis
  • and helping you to prepare and implement relevant tax documentation, and to justify the
    options for income/loss sharing between the different group companies established in
    different countries.

The author of this article :




International tax expert