In a press conference on 10 September 2024, Margrethe Vestager, the Executive Vice President of the European Commission, urged EU countries to develop proposals to reform transfer pricing and tackle the issue of shell companies after expressing her dismay that the proposals on reforming transfer pricing are not progressing well.

This follows after Vestager’s speech about the commission’s landmark victory against Apple. The European Court of Justice ruled that the company owed EUR 13 billion euros (USD 14 billion) in back taxes.

The Commission investigated these tax rulings and aggressive tax planning measures under State aid rules in the Belgian Excess Profit, Amazon, Fiat, and Apple cases. There were more. These are just a few of them. Today, the Court of Justice confirmed our decision in the Apple case.

Vestager also said the Commission will continue its work on harmful tax competition and aggressive tax planning in terms of legislative proposals and enforcement. She also put forward proposals regarding fairness in transfer pricing. These are as follows:

• Fairness between small and big players: All companies, whether big or small, whether digital or brick-and-mortar, they must all pay their fair share of taxes in proportion to their European profits.
• Fairness between European countries: It cannot be that some Member States allow “special deals” to attract certain companies by offering effective low corporate tax rates, whereas in other countries all companies pay their taxes.
• Social fairness: Vertager said social fairness matters because when big businesses don’t pay their fair share, it deprives public funds that are crucial for social security, education, and infrastructure. These expenditures help create prosperous market conditions for everyone. It’s unfair if some companies, especially those profiting the most, take their profits without contributing to these essential costs.