Global Transfer Pricing Update October 2026

Ireland published its Finance (No. 2) Bill, which addresses interest on advance pricing agreement (APA) true-ups and extends a Pillar Two transitional safe harbour, while the UK Autumn Budget pointed again to the new International Controlled Transactions Schedule (ICTS). In Mexico, the Senate amended the 2027 income tax reform and sent it back to the Chamber of Deputies, with the interest-deduction cap and new deduction limits still in play. The OECD prepared for its 9 November public meeting on intra-group services, the UN Tax Committee discussed profit attribution to permanent establishments, and Indonesia's criminal case against a pulp exporter showed how pricing disputes can escalate. Most of the larger items remain proposals, so groups should plan on them without treating them as final law.

October Transfer Pricing - Executive Summary

POLAND'S SIMPLER REPORTING NOW, TOUGHER FINANCIAL-TRANSACTION RULES PROPOSED

Poland's act amending the PIT and CIT laws was signed on 15 October and published in the Journal of Laws on 21 October 2026 (Dz.U. 2026 poz. 1371). It enters into force on 5 November 2026. For tax years beginning after 31 December 2025, the annual TPR return no longer carries the statement on the arm's-length nature of prices, the return may be signed by a proxy under general Tax Ordinance rules, and micro and small enterprises no longer report financial indicators. The Ministry of Finance also issued the seventh edition of its TPR questions and answers on 26 October.

In parallel, a draft regulation amending the CIT transfer pricing regulation (project no. 1052) is dated 12 October and was published on the government legislation site on 14 October. It would add a new chapter on financial transactions, requiring the analysis to confirm the real nature of loans, guarantees, sureties and cash pooling. For loans, this includes the borrower's debt capacity, repayment terms and whether interest is actually paid. For guarantees, it includes the guarantor's capacity to pay and the benefit to the beneficiary. The draft would also tighten the conditions for offsets and is intended to apply from 1 January 2027. It remains a draft and may change after consultation.

The act matters for timing as well as content. It applies to the TPR for 2026, which is filed in 2027, and the current TPR regulations lapse once new ones are issued.

What this means: the compliance burden on the 2026 TPR is easing, but the substance expected behind financial transactions is rising. Groups with Polish intra-group loans, guarantees or cash pools should start collecting creditworthiness analysis and evidence of the actual commercial terms before the 2027 rules take effect.

IRELAND'S FINANCE BILL ADDRESSES APA TRUE-UPS AND PILLAR TWO RELIEF

Ireland presented Budget 2027 on 6 October and published the Finance (No. 2) Bill 2026 on 19 October. Advisers highlight a provision for preliminary tax where an assessment is amended to give effect to one or more APAs covering transfer pricing or profit attribution to permanent establishments: the additional tax is treated as due within one month of the amendment, provided the original return made full and true disclosure. The effect is to avoid late-payment interest exposure on APA true-ups.

The Bill also implements the OECD Side-by-Side package for periods starting on or after 1 January 2026 and extends the Transitional CbCR Safe Harbour by one year. Separate changes give groups two years after period end to make interest limitation elections for periods starting from 1 January 2027, and adjust the interest relief rules for certain on-lending within Irish transfer pricing rules. The Bill is not yet law.

The Bill sits alongside Budget 2027 measures that advisers describe as consistent with Ireland's competitiveness agenda, including a five-year extension of the Knowledge Development Box and a higher preliminary-tax threshold for large companies. Advisers did not identify changes to the Section 110 transfer pricing rules in the Bill.

What this means: groups with Irish APAs or APA applications get more certainty on cash-tax timing. Groups relying on the transitional safe harbour should note the longer period, subject to enactment.

UNITED KINGDOM BUDGET POINTS TO ICTS AND WIDER CERTAINTY ROUTES

The Autumn Budget on 28 October 2026 confirmed the direction of travel on the International Controlled Transactions Schedule, which is expected to apply for accounting periods beginning on or after 1 January 2027. Final regulations and the HMRC notice had not been issued at the time of writing. Advisers also report a call for evidence on how large and complex groups manage the interaction between corporation tax and their transfer pricing and international reporting obligations.

Separately, the entry threshold for the Advance Tax Certainty Service is reported to fall from £1 billion to £300 million from 4 November 2026, which would open the service to a much wider group of businesses. Adviser commentary links the change to low take-up since the service launched in July.

The Budget also confirmed that the government is proceeding with the international tax measures in the draft legislation published in July. For transfer pricing teams the practical question is timing: the first ICTS period begins in about two months for calendar-year groups, while the final template and regulations are still awaited.

What this means: UK groups should check whether their ERP and consolidation data can produce transaction-level information by category and counterparty for the first ICTS period, and consider whether the lower threshold makes an application worthwhile. These points rest on adviser summaries of the Budget and should be confirmed against the Budget documents before being relied on.

MEXICO'S INCOME TAX REFORM RETURNS TO THE CHAMBER OF DEPUTIES

On 27 October 2026, the Senate approved the 2027 Revenue Law and the Federal Rights Law without changes, but amended the income tax (ISR) reform and returned it to the Chamber of Deputies. The amendment to Article 78-E removes terminal vehicle assemblers operating under a bonded-warehouse authorization, and holders of permits to sell gasoline and diesel, from the new mechanism that limits deductions and tax-loss use for companies with income above MXN 50 million. Press reports describe the Senate vote as wide, with some variation in the reported counts.

The Senate did not change the proposal to cut the net interest deduction limit from 30% to 20% of adjusted taxable profit. The deductions mechanism, as proposed, allows 99% of deductions where they equal 96.67% or less of income. The Chamber's finance committee was set to consider the amended text on 4 November, with no final vote or publication in the Official Gazette confirmed as of 3 November.

What this means: the exemptions are narrow and the interest cap is unchanged, so groups financing Mexican subsidiaries with intra-group debt should model the 20% cap now. Final text is still pending.

5. OECD AND UN - INTRA-GROUP SERVICES AND PE PROFIT ATTRIBUTION

The OECD confirmed a hybrid public consultation meeting on Chapter VII of the Transfer Pricing Guidelines on 9 November 2026 in Paris. The draft revisions, released on 1 June, cover accurate delineation, the benefit test, pass-through costs and 21 new examples. The OECD published the public comments on 24 August; one adviser report counts over 100. The draft is not consensus guidance. The OECD also published its Country-by-Country Reporting peer review compilation on 19 October.

The UN Tax Committee met in Geneva from 20 to 23 October for its 33rd session. The Transfer Pricing Subcommittee presented an initial report on possible work on profit attribution to permanent establishments, and speakers urged reviewing approaches beyond the separate-entity model. The Subcommittee's mandate also includes recommendations by 2028 on updating the UN Transfer Pricing Manual, including chapters on intra-group services, intangibles and financial transactions.

The OECD draft states that it reflects delegates' views and is not a consensus position, and a final text is not expected before 2027.

What this means: services charges should be tested against the stricter benefit and delineation analysis now proposed. For service-heavy and digital groups, the UN work signals possible divergence from the OECD approach on PE profits over the medium term.

SOUTH AFRICA AND KENYA's - NEW DOMESTIC AND LOCAL RULES

South Africa: special economic zone dealings move under transfer pricing rules

The Taxation Laws Amendment Bill (B32-2026) was tabled on 21 October alongside the Medium-Term Budget Policy Statement. According to adviser reports, from 1 January 2027 the current 20% connected-person test for special economic zone companies would be replaced by arm's-length rules under section 31, applying to dealings with connected parties. A free-standing section 31B had been proposed in draft in July; advisers differ on how the tabled wording is framed. The Bill is not yet law.

Kenya: new transfer pricing rules reported in October

Kenya's Income Tax (Transfer Pricing) Rules, 2026 (Legal Notice 186) are recorded by Kenya Law as published on 18 September and were widely reported by advisers in October. Advisers differ on whether the rules took effect on 12 August, when they were made, or on 18 September, when they were gazetted. The rules extend to preferential tax regimes, link to Country-by-Country Reporting and include a commodity pricing rule based on quoted prices around the shipment date. Separate Minimum Top-up Tax Regulations (Legal Notice 189) were gazetted the same day.

What this means: groups with Kenyan or South African special-zone operations should review documentation and intercompany pricing, and confirm the effective date of the Kenyan rules locally before relying on one date.

INDONESIA'S - TRANSFER PRICING MEETS CRIMINAL INVESTIGATION

On 15 October 2026, Indonesia's Attorney General's Office named a director and corporate secretary of PT Toba Pulp Lestari a suspect in an investigation into alleged under-invoicing of pulp exports to affiliates between 2008 and 2025. He was detained from 16 October for an initial period ending 4 November. The company had been named a corporate suspect on 7 September, and two tax officials were named earlier. Prosecutors allege a state financial loss of around Rp 2 trillion.

These are allegations: no indictment or court finding had been reported at the time of writing. The case nevertheless shows that export pricing, product classification and related-party invoicing can attract enforcement well beyond a conventional tax audit.

What this means: groups with export flows to affiliates, particularly in commodities, should make sure product descriptions, customs data, invoices and pricing support are consistent.

OTHER OCTOBER TP DEVELOPMENTS

Germany - JStG 2026. The Bundestag Finance Committee held its public hearing on the Annual Tax Act 2026 on 2 November. The bill would double interest on back taxes to 0.3% per month from 2027, and the final readings are reportedly planned for mid-November. It is not yet law.

Singapore - share-based compensation. On 23 October, IRAS announced an administrative concession allowing taxpayers to revisit earlier cost-plus positions to include share-based compensation, with relief from transfer pricing surcharges where conditions are met.

Belgium - Local File deadline. The Local File form (275.LF) deadline was extended to 10 November 2026, a change announced in September because of a delay to the new XML filing tool. A corporate return filed on time is not treated as incomplete solely because the form is missing, and filings on the old schema are no longer accepted. The corporate return deadline was extended to 15 October, and the Pillar Two notification deadlines to 31 October.

Vietnam - Decree 255/2026/ND-CP (recently effective). The decree took effect on 1 July 2026 and applies from the 2026 corporate income tax year. It replaces Decrees 132/2020 and 20/2025, widens the related-party definition beyond the 25% ownership test, raises the documentation-exemption revenue threshold from VND 200 billion to VND 500 billion and sets a 40-day period for transfer pricing examinations, extendable once. The 30% of EBITDA interest cap is unchanged. No October implementing guidance was found.

India - tribunal rulings. Indian tribunals reported in October included rulings deleting advertising, marketing and promotion adjustments for Vodafone Digilink, restricting corporate guarantee fees to 0.5%, and deleting head-office services adjustments. Several were pronounced before October.

European Union - DAC recast. The European Commission opened a public consultation on the recast of the Directive on Administrative Cooperation on 6 October, running to 1 December, while comments on the separate Direct Tax Omnibus proposal, which would remove one of the two ATAD controlled foreign company models, are due by 5 November. Both remain proposals.

United States, Brazil, Colombia and Korea. Coca-Cola's Eleventh Circuit appeal, argued in June, remained undecided. Brazil's 2025 transfer pricing documentation was due on 31 October. In Colombia, a 15% penalty reduction for transfer pricing formalities is available until 19 November. Korea's 2026 tax reform bill, which proposes wider fines for transfer pricing documentation errors, remains before the National Assembly.

WHAT OCTOBER TELLS US ABOUT THE DIRECTION OF TRANSFER PRICING

1. Financial transactions are the next area of codification

Poland's draft chapter and the Irish interest provisions show tax authorities and legislators moving from general principles to specific rules for loans, guarantees and cash pooling.

2. Data and reporting expectations keep rising

The UK's ICTS direction, the Belgian Local File data requirements and Kenya's broader documentation demands all point to more structured, transaction-level data.

3. Certainty and enforcement are expanding together

Ireland's APA provision and the UK's wider Advance Tax Certainty Service sit alongside Indonesia's criminal investigation and Mexico's new deduction limits.

PRIORITY ACTIONS FOR MULTINATIONAL GROUPS

Evidence financial transactions. Collect creditworthiness analysis, repayment terms and evidence of actual payments for intra-group loans, guarantees and cash pools, starting with Polish and Mexican exposures.

Model the Mexican interest cap. Test intra-group financing against the proposed 20% limit while the final text is awaited.

Prepare ICTS data. Check that systems can report controlled transactions by category and counterparty for periods starting on or after 1 January 2027.

Consider APA and certainty routes. Where exposure is material, review whether an APA or the wider UK service could provide earlier certainty.

Reconcile commodity and export pricing evidence. Product classification, customs data, invoices and pricing support should tell the same story.

PLANNED TRANSFER PRICING UPDATES IN NOVEMBER

Several dates fall just after month-end: Indonesia's initial detention period ends on 4 November, Poland's act enters into force on 5 November, the OECD holds its Chapter VII meeting on 9 November, and Belgium's Local File deadline is 10 November. Businesses should also watch the Mexican Chamber of Deputies vote, the German final readings, enactment of the Irish Finance Bill and South Africa's tax bills, final UK ICTS regulations, and the Eleventh Circuit's decision in Coca-Cola. The direction is consistent: transfer pricing positions need to be technically correct, supported by evidence and aligned with what happens in practice.