Transfer Pricing Certainty New Hurdle – IFRS 18

The release of IFRS 18 – Presentation and Disclosure in Financial Statements – marks a major shift in financial reporting, enhancing transparency and comparability. It redefines income and expense categorization, mandates subtotals like Operating Profit and tightens rules on performance measure disclosures. While primarily aimed at investors, IFRS 18 impacts also transfer pricing, where dimensions like benchmarking and functional analyses depend on financial data. The divergence between accounting and transfer pricing profit definitions, data asymmetry and ERP alignment challenges may complicate tax certainty. With application from 2027 and early adoption allowed, tax and transfer pricing teams must prepare for increased complexity and potential cross-border controversy.