Mazars Tax Newsletter - OECD transfer pricing guidelines on financial transactions (Part I: Intra-Group Loans)
Mazars Tax Newsletter Part I: Intra-Group Loans
The OECD's Guidance provides an insight on the arm’s length treatment of various financial transactions among related parties. The Guidance has been published as a follow up guidance in relation to Base Erosion and Profit Shifting ("BEPS") Action 4 and Actions 8-10. Sections A- E of the Guidance will be added as a new Chapter X of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations ("OECD TPG"), whereas the guidance on the determination of risk-free and risk-adjusted rates of return (Section F) will be included in Chapter I of the OECD TPG.
Given that that Guidance was the first time that multinational enterprise (MNE) groups are provided with guidelines on how to structure and price intra-group financial transactions, we will focus on accurate delineation of the transactions and intra-group loans, in this newsletter. The discussion on treasury functions would be covered in part II.
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