The importance of being capitalized electrónico the right debt-to-equity level for intercompany financing in Luxembourg Pawel Wroblewski and Marc Rasch
By: Wroblewski, Pawel
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Contributor(s): Rasch, Marc.
Material type: 
ArticleSubject(s): PRECIOS DE TRANSFERENCIA | GRUPOS DE EMPRESAS | FINANCIACION | OPERACIONES FINANCIERAS | OPERACIONES SOCIETARIAS | AMPLIACION DE CAPITAL | LUXEMBURGO
In:
International Transfer Pricing Journal v. 29, n. 1, 2022, p. 67-71Summary: The recent update of the OECD Guidelines provides long-awaited guidance as to how to apply the arm’s length principle in relation to financial transactions. An important element of this guidance covers the debt-and-equity balance from a transfer pricing perspective. From a Luxembourg point of view, absent any official regulations covering thin capitalization and in line with the OECD Guidelines, it is expected that the market practice of 85:15 will no longer be applicable, unless it can be supported by a proper transfer pricing analysis. Non-supported debt-to-equity ratios may lead to a shift in the burden of proof.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Recursos electrónicos | IEF | IEF | ITPJ/2022/1-3 (Browse shelf) | Available | ITPJ/2022/1-3 |
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Resumen.
The recent update of the OECD Guidelines provides long-awaited guidance as to how to apply the arm’s length principle in relation to financial transactions. An important element of this guidance covers the debt-and-equity balance from a transfer pricing perspective. From a Luxembourg point of view, absent any official regulations covering thin capitalization and in line with the OECD Guidelines, it is expected that the market practice of 85:15 will no longer be applicable, unless it can be supported by a proper transfer pricing analysis. Non-supported debt-to-equity ratios may lead to a shift in the burden of proof.
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