Many disputes escalated all the way to the apex courts/tax tribunals of EU Member States and even to the Court of Justice of the European Union (CJEU).
Once again, multinationals found themselves up against determined tax authorities in high‑stakes disputes, and courts were frequently asked to intervene and define the boundaries between legitimate transfer pricing policy and aggressive tax positions.
What emerged from the year is a distinctly consistent judicial theme:
Below, we recap a few key European transfer pricing cases of 2025.
| Case Details | Romania – Arcomet Towercranes (C‑726/23, CJEU - 4 Sept 2025) |
| Issue | Do transfer pricing true‑ups qualify as VATable consideration? Can authorities demand documentation beyond invoices? |
| Facts | The Romanian entity provided broad intra‑group services (strategy, supplier negotiations, engineering, financing, risk‑bearing). TNMM year‑end true‑up invoices were issued when taxpayers' profitability exceeded the arm’s‑length range. The Romanian tax authority denied VAT deduction, arguing insufficient evidence of services. |
| Court Decision | True‑ups are VAT‑relevant consideration if they reflect real services and authorities may demand additional evidence to verify services. |
| Takeaway | VAT can fully apply to TP adjustments when they reflect remuneration for services. In addition to invoices other documentation is of value as evidence of services and substance must be proven. |
| Case Details | Spain – Bunge Ibérica (Sentencia del Tribunal Supremo 3721/2025 - 15 July 2025) |
| Issue | Under CUP, must interest rates be symmetric? Credit rating at what level to apply? |
| Facts | The Spanish entity used a zero‑balance cash pool. Spanish authority rejected asymmetric deposit/loan rates and argued that the subsidiary should use the group credit rating rather than its local rating. |
| Court Decision | CUP requires symmetry between deposit and loan rates. Group‑level rating applies because cash‑pooling was centrally controlled and was of low risk. |
| Takeaway | A well-documented transfer pricing analysis bringing out the nature of cash pooling and risk allocation is important. |
| Case Details | Germany – Import GmbH (VII R 36/22 - 15 July 2025) |
| Issue | Can customs authority reject transaction value when TP adjustments reflect non arm’s‑length pricing? |
| Facts | The German entity imported goods from group companies. Upward adjustments to purchases occurred because its margins exceeded the 1.93% target margin under the TP policy. Customs authorities considered this as evidence of undervaluation of purchases. |
| Court Decision | Upward TP adjustments show original customs values were too low. Customs authorities may reject transaction value and apply secondary valuation methods by revisiting facts. |
| Takeaway | Customs–TP alignment is essential. Large TP true‑ups could result in potential customs non‑compliance. |
| Case Details | Denmark – Accenture A/S (Supreme Court - 9 Jan 2025) |
| Issue | Arm’s length margin and adequacy of documentation |
| Facts | The Danish entity paid 30% cost‑plus for secondees and a 7% IP royalty using global benchmarks. Danish authorities challenged the amounts as excessive. |
| Court Decision | Tax authorities cannot arbitrarily reject the TP methodology but need to prove by way of comparable arm’s length range. If robust documentation is maintained by the taxpayer, the same cannot be rejected discretionarily. |
| Takeaway | Strong TP documentation with detailed FAR analysis and appropriate benchmarking is a good defence mechanism. |
| Case Details | Denmark – EET Group (Supreme Court - 21 May 2025) |
| Issue | Can interquartile range (IQR) deviation alone prove non-compliance with arm’s length principle? |
| Facts | The Danish entity sold goods to various subsidiaries applying arm’s length pricing based on gross profits of such subsidiaries. Tax authorities did TP adjustment considering net margins and applying strict adherence to IQR. |
| Court Decision | Upheld the application of gross margins and commented that statistical application of IQR needs to be done cautiously considering the sample size and comparability challenges. |
| Takeaway | Rationale approach for application of transfer pricing with practical considerations to availability of data is important. |
| Case Details | Netherlands – MC Parts BV (Amsterdam Court - 24 July 2025) |
| Issue | Should transfer pricing adjustment related to price of goods affect customs’ valuation? |
| Facts | The Dutch entity purchased goods from its Japanese parent and later the pricing of the goods was adjusted upwards to align with the TP policy to achieve an operating margin of certain percentage. |
| Court Decision | If the TP adjustment is related to the goods and consideration, consequently it needs to be considered for application of customs duties by revisiting the valuation under customs laws. |
| Takeaway | Timely evaluation of link between transfer pricing adjustment and customs valuation for avoidance of additional taxes, interest and penalties. |
| Case Details | France – A. Menarini Diagnostics (Conseil d’État - 7 May 2025) |
| Issue | Are losses proof of profit shifting? Is a single internal CUP reliable? |
| Facts | The French entity purchased goods from Italian group entity. The French entity had recurring losses even when it was not in a start-up phase, as well as when the group was profitable. The tax authorities did a TP adjustment by comparing the gross margin when similar products were purchased from a third-party supplier. |
| Court Decision | Losses alone do not prove profit shifting and non-adherence to arm’s length pricing.
Tax authorities can invoke an internal comparison even if it is with a single unrelated supplier when it is economically coherent. |
| Takeaway | The case is referred back to the lower court for revisiting certain aspects and that underlines importance of a detailed review of the nature of operating expenses for transfer pricing purposes, especially when an entity incurs losses. |
| Case Details | Italy – CNH Industrial & FPT (Cassation - 22 Apr 2025) |
| Issue | Is the taxpayer supposed to demonstrate arm’s length pricing when the transactions are below materiality level? |
| Facts | The taxpayer classified <€5m transactions as “non‑material”, excluding them from documentation. |
| Court Decision | Simplified documentation rules do not exempt taxpayers from proving that the intercompany prices are arm’s‑length. Materiality thresholds may reduce documentation, but they cannot replace the duty to apply arm’s‑length pricing or shift the burden of proof to the tax authorities. |
| Takeaway | It is important to delineate and capture all intra-group transactions and provide some economic rationale (if not a benchmarking for smaller transactions) in the TP documentation. |
| Case Details | Netherlands - Tobacco BV (Gerechtshof Amsterdam ECLI:NL:GHAMS:2025:2377 -September 2025) |
| Issue | Does the termination and transfer of licensing/distribution rights to a group entity require arm’s‑length exit compensation? |
| Facts | The taxpayer terminated its licensing rights held in Netherlands and transferred it to a UK group entity. The tax authorities treated the rights as intangible, having profit potential to the transferee and invoked TP adjustment and penalty. |
| Court Decision | Upheld the TP adjustment relating to the exit upon transfer of licensing/distribution rights. It agreed the need for arm’s length valuation taking into account the value of the rights transferred from the perspectives of the transferor, resulting in €1.3bn additional income to the Dutch taxpayer. |
| Takeaway | Transfer of functions and assets, including intangibles, especially in business reorganisation/restructuring, need careful consideration and computation of arm’s length outcomes based on systematic valuation methods. |
These cases demonstrate an increasingly consistent judicial trend across Europe. Transfer pricing must reflect economic reality, not accounting form or administrative assumptions. Courts continue to reject aggressive tax authority positions that rely on statistical derivatives, rigid interpretations when these approaches are not grounded in actual functions, risks and economic substance. For multinational groups, these rulings collectively highlight the importance of:
As part of the ongoing implementation of the Residential Zoned Land Tax (RZLT), landowners are reminded that 1 April 2026 is a critical statutory deadline.
On 11 March 2025, the European Commission formally adopted the VAT in the Digital Age (ViDA) initiative. This new legal framework introduces mandatory electronic invoicing (e-invoicing) for intra-EU supplies of goods and services, which will become effective across the European Union (“EU”) as from 1 July 2030.
2025 witnessed some interesting developments on the international tax and transfer pricing (TP) litigation side. Across Europe, multinationals faced tax authorities that challenged complex cross-border structures, intragroup financing, service arrangements, customs valuation and year-end true-ups.
Amid growing regulatory and tax complexity, Transfer Pricing stands as a critical priority for multinationals in Ireland and globally
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