How New EU Tax And Transfer Pricing Rules May Affect M&A

This article discusses new and proposed European tax rules up to 2025, aswell as recent transfer pricing rules, that have a far-reaching effect on mergers and acquisitions.

In particular, the European Union's Anti-Tax Avoidance Directive, or ATAD, and the minimum tax rules resulting from the introduction on Jan. 1 of Pillar Two, also known as the global anti-base erosion rules, may raise red flags during due diligence. They therefore deserve to be carefully analyzed.

A fiscal due diligence should also include consideration of risks and opportunities from a transfer pricing perspective. These will be discussed based on the guidance published in the Organization for Economic Cooperation and Development's 2022 transfer pricing guidelines.