Although they are treated separately from a legislative perspective, in practice they frequently intersect: the same intra-group transaction may be analyzed simultaneously from the standpoint of market value (transfer pricing) and the VAT taxable base. Transfer pricing adjustments may trigger VAT corrections, interest, and penalties, particularly where there is no clear documentation explaining the economic nature of the transaction.
The recommendation for companies is to approach transfer pricing and VAT documentation in an integrated manner, not in isolation. Group policies, intra-group agreements, and comparability studies must be consistent and support both the arm’s length principle and the applied VAT treatment. Solid, up-to-date, and well-aligned documentation significantly reduces risks during tax audits and provides financial predictability.
