Legal Uncertainty in Transfer Pricing Corrections by the DGT: Gauging the Limits of Authority Under Article 18 of the Income Tax Law

The authority of the Directorate General of Taxes (DGT) to conduct transfer pricing corrections is an important instrument in safeguarding the national tax base. However, without clearly defined boundaries and measurable parameters, such authority has the potential to give rise to legal uncertainty for Taxpayers — necessitating a balance between the state's interest in securing tax revenue and the protection of Taxpayers' rights.