Together with the EU Joint Transfer Pricing Forum, the European Commission has drafted guidelines for Advance Pricing Agreements (APAs). APAs are agreements between European tax administrations defining how and where future transactions between related companies in different EU States will be taxed. In such cross-border situations, transfer pricing rules must ensure that the tax base is allocated correctly to the countries where the related companies actually trade. However, the application of national transfer pricing rules causes problems for companies active in different Member States. Therefore, the proposed guidelines will facilitate advance agreements between tax authorities and tax payers and also increase legal certainty.