Interest rate benchmarking for transfer pricing purposes electrónico a comparison between the loan and the bond approach Thomas Petrakos, Vikram Chand and Amanda Pletz
By: Petrakos, Thomas
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Contributor(s): Chand, Vikram | Pletz, Amanda.
Material type: 
ArticlePublisher: 2021Subject(s): PRECIOS DE TRANSFERENCIA | PRINCIPIO DE PLENA COMPETENCIA | GRUPOS DE EMPRESAS | PRESTAMOS | INTERES | TIPOS
In:
International Transfer Pricing Journal v. 28, n. 4, 2021, p. 242-252Summary: This article analyses how an arm's length interest rate for an intercompany loan can be determined under the two most commonly accepted approaches; the loan approach and the bond approach. In this respect, it first provides some considerations as to performing a loan benchmarking study, followed by some of the main differences and theoretical advantages and disadvantages of the two approaches. As a second step, a case study is presented, for which an arm's length interest rate is determined under both approaches. The results of the two approaches are then discussed and compared. It is argued that the bond approach yields much more reliable results.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Recursos electrónicos | IEF | IEF | ITPJ/2021/4-4 (Browse shelf) | Available | ITPJ/2021/4-4 |
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Disponible únicamente en formato electrónico.
Resumen.
This article analyses how an arm's length interest rate for an intercompany loan can be determined under the two most commonly accepted approaches; the loan approach and the bond approach. In this respect, it first provides some considerations as to performing a loan benchmarking study, followed by some of the main differences and theoretical advantages and disadvantages of the two approaches. As a second step, a case study is presented, for which an arm's length interest rate is determined under both approaches. The results of the two approaches are then discussed and compared. It is argued that the bond approach yields much more reliable results.
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