New regulations have increased the need for robust transfer pricing analysis
The guidance from the OECD published on 11 February 2020 introduced for the first time special considerations and methods for financial transactions in the OECD Transfer Pricing Guidelines.
Now, more than ever, it is important that multinationals maintain a robust approach to the arm’s length pricing of:
- Intercompany loans, receivables and factoring
- Intercompany financial and performance guarantees
- Participation in cash pools
- Hedging transactions
- Captive insurance arrangements
- Thin capitalization and debt capacity substantiation
- Real estate financing and other specialized transactions
Local tax administrations and financial transactions pricing
Local tax administrations are more intensely scrutinizing financial transactions pricing during tax audits. In the meantime, major events are occurring in the financial markets, such as the phaseout of LIBOR benchmarks and measures by Central Banks to curb inflation. The latter generally leads to increased interest rates. These global developments pose many questions for multinational taxpayers’ financial transactions transfer pricing policies.
How can we help with financial transactions transfer pricing?
Our financial economists have leading expertise in this area and are able to assist with various financial services:
- Help plan intercompany financial arrangements to assist with liquidity and other business objectives, while minimizing tax risk
- Perform diagnostics on an organization’s intergroup financial transactions, in light of the new OECD Guidance and the ever-changing local tax rules
- Design and help implement practical transfer pricing policies and operating procedures
- Prepare robust defense files which document the economic analysis and procedures
- Help MNEs navigate the tax controversy landscape
Our team of specialists has significant experience in working with the Dutch tax authorities. We are able to help resolve disputes related to financial transactions transfer pricing or as part of an APA/MAP process. Through our access to the global KPMG network, we can provide assistance with local issues worldwide.
