Luxembourg Transfer Pricing Association Inaugurated to Address TP Challenges

The Luxembourg Transfer Pricing Association (LTPA) announced its incorporation on July 11, marking a pivotal moment for the transfer pricing (TP) community in Luxembourg. As a non-profit organization, it was established by experts from multinational enterprises, law firms, consulting firms, academia, and associations.

“This significant milestone marks a new era for the TP community in Luxembourg,” the organization declared.

The LTPA aims to act as a unified voice and central reference point for the TP profession in Luxembourg. One of its primary goals is to develop a comprehensive framework for best practices and address evolving TP challenges. Additionally, the LTPA seeks to foster transparent dialogue and collaboration among enterprises, tax authorities, and industry associations to enhance understanding, compliance, and cooperation.

Membership options are available for individuals, corporations, and institutions.

The executive committee of the LTPA includes its president Vanesa Ramos Ferrín, vice president Pierre-Alexis Recroix, secretary Sophie Balliet, and treasurer Patrick Labranche.

Vanesa Ramos Ferrín, in addition to being LTPA president, is the managing partner at the independent TP boutique Transfair Pricing Solutions in Luxembourg, a role she has held since 2017. Ferrín also has prior experience in TP at PwC in Ecuador, where she worked from 2012 to 2013.

Ferrín, a TP expert with over 16 years of experience, emphasized “the critical need” for a unified platform to tackle the evolving challenges in the field. She noted that since becoming LTPA president, she has been approached by professionals and organizations not only from TP but also from related fields facing TP issues.

“This outreach confirms that the industry is seeking a unified voice for TP and that the LTPA has already gained significant recognition within the industry,” she stated.

Ferrín identified several key TP issues in Luxembourg, including an increase in TP assessments, intensified international controversy, and evolving EU regulations. One major concern is the heightened scrutiny over intercompany financing arrangements.

“Tax authorities globally are closely examining the substance and economic rationale of these transactions, leading to more rigorous assessments in Luxembourg. This scrutiny includes a thorough evaluation of the economic substance behind intercompany agreements to ensure they reflect real economic activities and value creation. These assessments lead to increased international controversy, demonstrating that current mechanisms to avoid such disputes are not sufficiently developed or exploited, which intensifies the challenges and uncertainty businesses face,” she explained.

Ferrín also mentioned that the increased scrutiny by European tax authorities aligns with recent changes in TP regulations, particularly those tightening rules for cross-border intercompany financing arrangements and interest limitations. This evolving landscape presents ongoing challenges for businesses to remain compliant while maintaining operational efficiency.

Vice president Pierre-Alexis Recroix, based in Luxembourg, is the TP leader at global investor services provider IQ-EQ. He previously served as a TP senior adviser for Grant Thornton in Luxembourg from 2015 to 2019.

By fLEXI tEAM