General transfer pricing adjustment clause introduced to the VAT regime in 2012

Abstract

A general transfer pricing adjustment clause has been in force in the Portuguese VAT legislation since 1 January 2012. The clause is based on Article 80 of the VAT Directive. Prior to the introduction of this clause, there was a specific objective valuation rule valid for real estate operations, based on Article 1 of the ‘Rationalization Directive’. Unlike this specific clause, which is still in force, the new clause is a general transfer price adjustment clause, applicable to any transactions between related parties. A possible English translation of the clause might be: