The new OECD guidance needs further clarification of the transfer pricing issues related to financial transactions

The new OECD guidance needs further clarification of the transfer pricing issues related to financial transactions

September 10, 2018

Last week, Copenhagen Economics submitted its comments to OECD’s newly released Public Discussion Draft on financial transactions.

In the comments, we point out our concerns, which can be considered in four different groups:

  • The first considers how the accurate delineation of the financial transaction can support the proper definition of the transaction for transfer pricing purposes (i.e. loan vs. capital contribution).
  • The second considers the use of risk-free interest rates as a remuneration for risk-bearing lenders with a limited functional profile.
  • The third considers the cost-approach as an alternative to determine the risk-adjusted rate of return.
  • The fourth considers some examples of potential internal comparable uncontrolled transactions (internal CUPs) to be used as reference in the pricing of controlled financial transactions.

Download the full comments

Read the OECD Public Discussion Draft

Learn more about the work of our IP Valuation & Transfer Pricing team

For further information, please contact Hendrik Fügemann or Vincenzo Zurzolo