By Melanie Beirens, Senior Consultant, Zanders, Belgium
As previously announced, the OECD today published its long-awaited transfer pricing guidance on financial transactions.
This follows a discussion draft that was published in July 2018. The current publication represents a consensus document that will be added as a new chapter to the OECD’s transfer pricing guidelines.
A first glance, we see no big surprises compared to the discussion draft; however, the guidance appears to require increased attention on the terms and conditions of a financial transaction, which could increase the compliance burdens for MNEs.
Additional pricing methods for intercompany loans in the form of credit default swaps and economic modeling have been added.
On the other hand, the final guidance omits the draft’s three approaches for rewarding cash pool participants.
Zanders Inside expects to publish a detailed article on the implications of this important guidance shortly.
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