Global Transfer Pricing Update September 2026

Court decisions in the Netherlands, Luxembourg and Italy again showed that intra-group financing and guarantee positions depend on contemporaneous evidence, while Indonesia's Toba Pulp Lestari investigation showed how a pricing dispute can escalate into a criminal case. Several of the most important items remain proposals rather than law, including the UK's ICTS regulations, Mexico's 2027 tax package, the EU Direct Tax Omnibus and Korea's reform bill. Across these developments the common message for multinational groups is that transfer pricing positions must be supported by data, documentation that reflects the real transaction and evidence that can be produced quickly.

1. ARGENTINA: A NEW TRANSFER PRICING REGIME

On 30 September 2026, Argentina's tax authority ARCA published General Resolution 5903/2026, signed on 28 September. The resolution repeals and merges the previous general transfer pricing regime, the international-operations information regime (including the Master File) and the Simplified International Operations Regime into a single text.

The filing thresholds rise sharply. The F.2668 information return is now required above ARS 1.5 billion in total related-party transactions or ARS 300 million for an individual transaction, compared with ARS 150 million and ARS 15 million previously. A full transfer pricing study is required above ARS 3 billion in total or ARS 600 million per transaction, and a Master File applies to groups with consolidated revenue above ARS 500 billion. The thresholds will be indexed to inflation from 2028.

The resolution also tightens substance. It adds rules for low-value-adding services, foreign intermediaries and business restructurings, requires every covered transaction to be analysed rather than sampled, and allows downward adjustments on the return only where they result from a treaty mutual agreement procedure. The regime applies to fiscal years starting on or after 1 October 2026, which is later than the original consultation draft proposed.

What this means: for calendar-year Argentine entities, the new regime begins with the 2027 fiscal year. Higher thresholds will remove some smaller groups from the heaviest filings, but the arm's-length obligation still applies below them and ARCA can still ask for support. Groups above the thresholds should expect a more rigorous transaction-by-transaction analysis.

2. KENYA: NEW RULES REPLACE THE 2006 FRAMEWORK

On 18 September 2026, Kenya gazetted the Income Tax (Transfer Pricing) Rules, 2026 (Legal Notice 186 of 2026), which revoke and replace the 2006 Rules. The new framework aligns Kenya's regime closely with the OECD Transfer Pricing Guidelines, introduces BEPS-style documentation requirements and links the rules to Country-by-Country Reporting.

The rules also extend transfer pricing analysis beyond ordinary cross-border related-party dealings into anti-avoidance and preferential-regime situations. Kenya's separate APA regime, in place since 1 January 2026, still appears to await gazetted implementing regulations, so the certainty route exists in law but is not yet fully workable in practice.

What this means: groups with Kenyan operations should compare their local files and intercompany policies with the OECD-aligned documentation standard, and review any arrangement involving a preferential regime or an intragroup charge that could attract anti-avoidance scrutiny.

3. SOUTH AFRICA: THE APA PILOT OPENS

South Africa's bilateral APA pilot opened for applications on 1 September 2026, following the six notices (7787 to 7792) published in Government Gazette 55152 on 7 August. On 2 September, SARS updated its APA webpage with pre-application and application forms.

The pilot accepts bilateral APAs only, with treaty partners. Applicants must have turnover above ZAR 10 billion (reduced from ZAR 50 billion in the April draft) and be active in distribution, manufacturing or intra-group services, with expected annual transaction values above ZAR 1 billion for goods or ZAR 300 million for services. Financial assistance and intellectual property transactions are excluded, rollback of up to three years is available, and SARS has indicated that only a limited number of applications will be admitted. No application numbers have yet been published.

Separately, the draft Taxation Laws Amendment Bill released on 30 July proposes a new section 31B, which would apply arm's-length pricing to dealings between a section 12R Special Economic Zone company and a connected South African resident company. Comments closed on 28 August and the proposal may still change before the bill is tabled.

What this means: groups with large, recurring South African related-party flows should consider whether a bilateral APA is realistic. The narrow eligibility criteria mean most applicants will need strong functional analysis, reliable financial information and a defensible method from the outset.

4. OECD: PILLAR TWO ADMINISTRATION AND THE CHAPTER VII REVIEW

On 2 September, the OECD/G20 Inclusive Framework approved a Pillar Two package, released on 11 September. It includes an updated GloBE Information Return, Administrative Guidance confirming that explicitly conditional taxes generally do not count as Covered Taxes, clarification on the use of local accounting standards under the QDMTT Safe Harbour, and terms of reference for a full legislative review of domestic IIR, UTPR and QDMTT rules.

This is Pillar Two administration rather than transfer pricing guidance, but transfer pricing adjustments flow directly into GloBE income and covered-tax calculations, so the two compliance functions increasingly need to work together. On intra-group services, the OECD published the public comments on its draft Chapter VII revisions on 24 August, and the public consultation meeting is scheduled for 9 November 2026 in Paris. The draft remains a consultation document and should not be treated as final guidance; a final text is unlikely before 2027.

What this means: groups should keep transfer pricing and Pillar Two teams aligned on year-end adjustments, and continue to test service charges against the stricter benefit and delineation analysis proposed in the Chapter VII draft.

5. COURTS: NETHERLANDS, LUXEMBOURG AND ITALY

Court decisions reported in September again turned on financing and guarantee arrangements, and on the quality of the evidence behind them.

Netherlands: weak documentation shifts the burden of proof

The Hague Court of Appeal's decision of 5 August (ECLI:NL:GHDHA:2026:2462), published in full on 10 September, reduced the deductible interest and commitment fees on intra-group credit facilities from EUR 1,283 million claimed to EUR 903 million, disallowing EUR 380 million. The Court found serious deficiencies in the contemporaneous transfer pricing documentation, which shifted the burden of proof to the taxpayer, while accepting in principle a total-cost approach and an ex-ante assessment of credit ratings. The decision is pseudonymised.

Luxembourg: restructurings are judged when they are made

Luxembourg's Administrative Court confirmed that amendments, waivers and restructurings of intra-group financing must be assessed against the commercial circumstances and realistic options available when the decision was taken, not with hindsight. This is useful authority for groups reworking intercompany loans.

Italy: guarantees need an identifiable benefit

The Corte di Cassazione considered whether a group company must be compensated for providing a guarantee to an affiliate. The analysis turned on whether the guarantee conferred an identifiable benefit and what an independent party would have charged.

What this means: the common thread is evidence. Credit analysis, the commercial rationale and the benefit to the borrower or beneficiary need to be documented at the time the arrangement is made, not reconstructed in an audit or appeal.

6. MALAYSIA AND SINGAPORE: TECHNICAL MECHANICS CLARIFIED

Malaysia: offsetting adjustments now available

Malaysia's Income Tax (Transfer Pricing) (Amendment) Rules 2026, P.U.(A) 300/2026, made on 19 August and gazetted on 27 August, continued to be applied and discussed through September. The rules allow a transfer pricing adjustment made to one party to be matched by an offsetting adjustment to the other party, on request and with Director General approval, revise the definitions of "service" and "MNE group" and delete Rule 10(3). They are deemed effective from year of assessment 2023, so they are directly relevant to open audits.

Singapore: share-based compensation in the TNMM cost base

On 25 September, IRAS updated its transfer pricing guidance on share-based compensation. Its position is that incurred, uncharged and notional share-based compensation belongs in the TNMM cost base for services. As a concession from year of assessment 2026, uncharged and notional amounts may be left out of the service income actually charged, while remaining in the cost base used to calculate the mark-up. The guidance also restates the 5% routine-services mark-up and the Amount B pilot running from 1 January 2026 to 31 December 2028.

What this means: groups with Malaysian or Singaporean service providers should review how adjustments and equity-based costs flow through their intercompany charges, particularly where open years are affected.

7. INDONESIA: TRANSFER PRICING MEETS CRIMINAL INVESTIGATION

On 12 August, Indonesia's Attorney General's Office named two tax-audit supervisors from the Directorate General of Taxes as suspects in a corruption investigation linked to PT Toba Pulp Lestari. On 7 September, prosecutors also named the company itself a corporate suspect. The investigation concerns alleged undervaluation of pulp exports to affiliates between 2008 and 2025, including declaring higher-value dissolving pulp as lower-value paper-grade pulp, with a provisional state loss of about IDR 2 trillion. The company has said it is verifying the matter.

This remains an investigation. No indictment or conviction has been reported and all conduct described is alleged. The case is nevertheless a reminder that export pricing, product classification and related-party invoicing can attract enforcement well beyond a conventional tax audit.

What this means: groups with commodity or export flows to affiliates should ensure product descriptions, customs and invoicing data and the pricing support all tell the same story.

OTHER SEPTEMBER DEVELOPMENTS

United Kingdom - ICTS. HMRC's consultation on the draft regulations, notice and template for the International Controlled Transactions Schedule closed on 31 July. The government intends the schedule to apply for accounting periods beginning on or after 1 January 2027, but no final regulations or notice had been issued at the time of writing.

Poland - TPR return. Parliament has adopted an act that removes the transfer pricing statement from the annual TPR return and allows signature under general Tax Ordinance proxy rules, for tax years beginning after 31 December 2025. It awaits presidential signature and publication.

Germany - interest on back taxes. The Annual Tax Act 2026 bill, adopted by the cabinet on 12 August, would raise interest on back taxes from 0.15% to 0.3% per month for interest periods from 1 January 2027. It is not yet law.

Mexico - 2027 Economic Package. Submitted on 8 September, the package proposes cutting the net interest deduction limit from 30% to 20% of adjusted taxable profit and introducing a cap on deductions for larger companies. It remains before Congress.

Canada and Colombia. Canada's consultation on simplified documentation for small taxpayers and small transactions closed on 4 September, with no outcome yet. In Colombia, the DIAN transfer pricing return and documentation window ran from 9 to 22 September for all taxpayers within the regime.

United States. On 29 September, Treasury and the IRS released the 2026-2027 Priority Guidance Plan, which retains the Section 482 project on the simplified Amount B approach. Coca-Cola's Eleventh Circuit appeal, argued on 25 June, remains undecided; the company's filings put the 2007-2009 liability at US$6.0 billion and indicate possible further exposure of up to about US$14 billion for later years.

Belgium and the EU. Belgium extended the Local File deadline to 10 November 2026, and the corporate return deadline was reported extended to 15 October. In the EU, the Commission's 24 June Direct Tax Omnibus proposal would remove one of the two ATAD CFC models because of its overlap with transfer pricing rules, with application from 2029 if the Council agrees unanimously.

Australia and South Korea. The ATO updated its Decision Impact Statement on Alcoa of Australia on 11 September, confirming that the decision does not depart from established Division 13 principles. Korea's 2026 tax reform bill, submitted to the National Assembly in early September, would clarify fines for non-compliant transfer pricing documentation and cut the CFC trigger from 17.5% to 15%, with most measures starting on 1 January 2027 if passed.

WHAT SEPTEMBER TELLS US ABOUT THE DIRECTION OF TRANSFER PRICING in 2026 to 2027

1. New regimes are moving from announcement to operation - Argentina, Kenya and South Africa show that rules announced earlier in the year are now live. Compliance teams can no longer treat these as future changes: thresholds, forms and filing obligations are already in force or taking effect.

2. Documentation quality decides financing dispute - The Dutch, Luxembourg and Italian decisions reinforce that contemporaneous evidence of credit standing, commercial rationale and benefit often decides the outcome, not the choice of method alone.

3. Certainty tools expand while enforcement deepens - South Africa's APA pilot sits alongside the UK's data-driven ICTS proposal, the EU's simplification agenda and Indonesia's criminal investigation. Tax authorities are building both routes to certainty and more powerful ways of testing the data.

PRIORITY ACTIONS FOR MULTINATIONAL GROUPS

• Re-map Argentine and Kenyan compliance. Confirm which returns, studies and Master Files apply under the new thresholds and rules, and from which period.

• Stress-test intra-group financing and guarantees. Make sure loans and guarantees reflect the actual borrower, commercial terms, alternatives and evidence prepared at the time.

• Treat proposals as planning signals. Prepare data for the UK ICTS, model Mexico's lower interest cap and track Korea and the EU Omnibus, without treating any of them as settled law.

• Assess certainty routes. Where exposure is material, consider whether South Africa's bilateral APA pilot or other APA and MAP routes could be more efficient than a later dispute.

• Align export and commodity pricing evidence. Product classification, invoices, customs data and pricing support should be consistent across related-party flows.

LOOKING AHEAD

The next major OECD milestone is the 9 November 2026 public consultation on the proposed Chapter VII revisions. Businesses should also watch Mexico's congressional timetable, the Korean National Assembly's vote on its reform bill, publication of Poland's TPR act and the final UK ICTS regulations, the first admissions to South Africa's APA pilot and the Eleventh Circuit's decision in Coca-Cola. Heading into the final quarter of 2026, the direction is consistent: businesses need transfer pricing positions that are technically correct, supported by evidence and aligned with what happens in practice.