Are bonds suitable to determine arm’s length interest rates of intercompany loans and do intercompany loans have to be collateralized? electrónico an empirical investigation Felix Ebeling, Nik Nolden and Gregor Schneider
By: Ebeling, Felix
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Contributor(s): Nolden, Nik | Schneider, Gregor.
Material type: 
ArticlePublisher: 2021Subject(s): BONOS | GRUPOS DE EMPRESAS | PRESTAMOS | INTERES | PRINCIPIO DE PLENA COMPETENCIA
In:
International Transfer Pricing Journal v. 28, n. 6, 2021Summary: A unique data set of more than 5,000 corporate bond and loan transactions between third parties was used to analyse two issues related to the arm’s length interest rate determination in practice. First the analysis presented in this article shows that the interest rate differences between the bonds and loans are statistically significant, but economically irrelevant. Second, when considering whether intercompany loans have to be collateralized, it can also be shown that unrelated parties too do not always agree on collateral. Moreover, within multinational groups, collateralization of intercompany loans would by no means appear to be compulsory based on economic theory.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Recursos electrónicos | IEF | IEF | ITPJ/2021/6-4 (Browse shelf) | Available | ITPJ/2021/6-4 |
Disponible únicamente el formato electrónico.
Resumen.
A unique data set of more than 5,000 corporate bond and loan transactions between third parties was used to analyse two issues related to the arm’s length interest rate determination in practice. First the analysis presented in this article shows that the interest rate differences between the bonds and loans are statistically significant, but economically irrelevant. Second, when considering whether intercompany loans have to be collateralized, it can also be shown that unrelated parties too do not always agree on collateral. Moreover, within multinational groups, collateralization of intercompany loans would by no means appear to be compulsory based on economic theory.
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