Hickman, Andrew
Transfer pricing of financial guarantees the limits of arm's length and a practical solution / Andrew Hickman, Marcelo Henrique Barbosa Moura
Resumen.
This article discusses how current approaches to pricing intra-group financial guarantees do not follow common practices and do not consistently apply the arm's length principle, which is used to determine the appropriate transfer price for transactions between related parties. These approaches also do not take into account recent updates of the OECD transfer pricing guidance related to risk control, and rely on complex and unsatisfactory valuation methods. The article suggests that revised guidance could potentially lead to different outcomes in cases like General Electric. Intra-group financial guarantees can be difficult to handle under the arm's length principle due to the capitalization of associated enterprises.
PRECIOS DE TRANSFERENCIA
GARANTIAS
OPERACIONES FINANCIERAS
DERECHO COMUNITARIO EUROPEO
PRINCIPIO DE PLENA COMPETENCIA
UNION EUROPEA
Moura, Marcelo Henrique Barbosa
Intertax 0165-2826 v. 51, n. 1, January 2023, p. 5-32
Transfer pricing of financial guarantees the limits of arm's length and a practical solution / Andrew Hickman, Marcelo Henrique Barbosa Moura
Resumen.
This article discusses how current approaches to pricing intra-group financial guarantees do not follow common practices and do not consistently apply the arm's length principle, which is used to determine the appropriate transfer price for transactions between related parties. These approaches also do not take into account recent updates of the OECD transfer pricing guidance related to risk control, and rely on complex and unsatisfactory valuation methods. The article suggests that revised guidance could potentially lead to different outcomes in cases like General Electric. Intra-group financial guarantees can be difficult to handle under the arm's length principle due to the capitalization of associated enterprises.
PRECIOS DE TRANSFERENCIA
GARANTIAS
OPERACIONES FINANCIERAS
DERECHO COMUNITARIO EUROPEO
PRINCIPIO DE PLENA COMPETENCIA
UNION EUROPEA
Moura, Marcelo Henrique Barbosa
Intertax 0165-2826 v. 51, n. 1, January 2023, p. 5-32