Transfer Pricing and Intra-Group Financing : : the Entangled Worlds of Financial Markets and Transfer Pricing - Second Revised Edition.

Transfer Pricing and Intra-Group Financing : : the Entangled Worlds of Financial Markets and Transfer Pricing - Second Revised Edition.

This is the second revised edition of the book published in 2012, and addresses the topic of intra-group financing and transfer pricing.

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Bibliographic Details
:
Bakker, Anuschka.
TeilnehmendeR:
Kale, Sharvari.
Place / Publishing House:Amsterdam : : IBFD Publications USA, Incorporated,, 2021.
Ã2021.
Year of Publication:2021
Edition:1st ed.
Language:English
Online Access:
Physical Description:1 online resource (933 pages)
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Table of Contents:
  • Cover
  • Title
  • Copyright
  • Acknowledgements
  • Table of Contents
  • Chapter 1: The Treasury Functions
  • 1.1. Introduction
  • 1.2. Role of treasury within MNEs
  • 1.2.1. Typical organization of the corporate treasury function
  • 1.2.2. Key functions and risks
  • 1.2.3. Treasury operating model
  • 1.2.4. Centralized intra-group financing policy
  • 1.3. Relationship between tax department and other departments
  • 1.4. Relevance of tax for treasury activities
  • 1.5. Key transfer pricing considerations
  • 1.6. Typical transfer pricing models for intra-group financing companies
  • 1.7. IP considerations to group financing companies
  • 1.8. Common jurisdictions for group financing companies
  • 1.9. Staying in control of transfer pricing for the treasury operations
  • 1.10. BEPS impact on treasury activities
  • 1.11. Concluding remarks
  • Chapter 2: Accurate Delineation of Intra-Group Financial Transactions
  • 2.1. Introduction
  • 2.2. Nature of intra-group transactions
  • 2.3. Delineation and (re)characterization
  • 2.3.1. OECD Guidelines: Chapter I
  • 2.3.2. OECD Guidance on Financial Transactions
  • 2.3.3. Case study on potential recharacterization: Cash pool deposit position
  • 2.3.4. Case study on recharacterization: Intercompany loan transaction
  • 2.4. Key aspects to be taken into account by practitioners
  • Chapter 3: International Guidance, Case Law and Market Developments
  • 3.1. Introduction
  • 3.2. The OECD Guidance and selected international developments
  • 3.2.1. OECD guidance on transfer pricing aspects of intra-group financing
  • 3.2.2. Key takeaways for practitioners from the OECD Guidance on Financial Transactions
  • 3.3. UN Guidance
  • 3.4. Interplay with BEPS action reports
  • 3.5. EU developments
  • 3.5.1. EC's Communication of Business Taxation in the 21st Century
  • 3.5.2. ATAD
  • 3.5.3. DAC6
  • 3.6. Case law.
  • 3.6.1. Landmark cases
  • 3.6.2. Selection of cases
  • 3.7. Changing market circumstances and economic crises
  • 3.7.1. Effects of changing market circumstances and economic crises impacting intra-group financing transactions
  • 3.7.2. The impact of COVID-19
  • 3.7.3. COVID-19: Actions to be taken by MNEs
  • Chapter 4: Credit Ratings
  • 4.1. Introduction
  • 4.2. Background
  • 4.2.1. Credit rating: the basics
  • 4.2.2. Official credit ratings, credit rating agencies and credit rating scales
  • 4.2.3. Types of ratings
  • 4.3. Group rating versus subsidiaries ratings
  • 4.4. Issuer vs. issue-specific rating
  • notching down/up principles
  • 4.4.1. Notching adjustments
  • 4.5. Determination of credit ratings
  • 4.5.1. Step 1: Determine the standalone credit rating of the affiliate
  • 4.5.2. Step 2: Determine implicit (parental) support considerations
  • 4.5.3. Step 3: Make adjustments for debt features
  • 4.5.4. Overview of methodologies / tools
  • 4.6. Impact of the COVID-19 pandemic
  • 4.7. Transfer pricing case law on credit ratings
  • Chapter 5: Common Types of Intra-Group Financing Arrangements
  • 5.1. Setting the scene
  • 5.2. Loans
  • 5.2.1. Introduction
  • 5.2.2. Elements of an arm's length intra-group loan
  • 5.2.3. Building block: Volume
  • 5.2.3.1. Debt service capacity analysis
  • 5.2.3.2. Financial ratios
  • 5.2.3.3. Financial modelling and sensitivity analysis
  • 5.2.3.4. Testing the borrower's financial ratios
  • 5.2.3.5. LTV analysis in real estate
  • 5.2.4. Building blocks: Terms and conditions, and creditworthiness
  • 5.2.4.1. Two-sided approach
  • 5.2.5. Building block: Interest rate
  • 5.2.5.1. Pricing approaches
  • 5.2.5.2. Interest rate analysis
  • 5.2.5.3. Identifying comparable transactions
  • 5.2.6. Interplay with other intra-group transactions and transfer pricing applied
  • 5.2.7. Practical examples.
  • 5.3. Cash pooling, management and optimization
  • 5.3.1. Cash pool structures
  • 5.3.2. Accurate delineation
  • 5.3.3. Cash pool: Transfer pricing analysis
  • 5.3.4. Case study
  • 5.4. Financial and performance guarantees
  • 5.4.1. Setting the scene
  • 5.4.2. Types of guarantees
  • 5.4.3. Guarantees: Transfer pricing analysis
  • 5.4.4. Practical examples
  • 5.5. Fees
  • 5.5.1. Introduction
  • 5.5.2. Facility fees
  • 5.5.3. Commitment fees
  • 5.5.4. Upfront fees
  • 5.6. Captive insurance
  • 5.6.1. Introduction
  • 5.6.1.1. OECD and international developments
  • 5.6.1.2. Captive insurance and reinsurance activities
  • 5.6.2. Accurate delineation of transactions
  • 5.6.3. Step approach for determining arm's length remuneration of intra-group captive insurance transactions
  • 5.6.4. Pricing
  • 5.6.4.1. CUP method
  • 5.6.4.2. Actuarial analysis
  • 5.6.4.3. Combined ratio and return on capital
  • 5.6.4.4. Group synergies and agency sales
  • 5.6.4.5. Numerical example
  • Chapter 6: How to Take Intra-Group Financing Forward in Your Organization
  • 6.1. Introduction
  • 6.2. Re-thinking intra-group treasury operating model and financing set-up
  • 6.3. Relevant developments
  • 6.3.1. Tax and TP developments
  • 6.3.2. Treasury developments
  • 6.3.3. Market developments
  • 6.3.4. Outlook
  • 6.4. Developing an FTTP roadmap
  • 6.4.1. Identify phase
  • 6.4.2. Diagnose phase
  • 6.4.3. Design phase
  • 6.4.4. Implementation phase
  • 6.4.5. Document phase
  • 6.4.6. Maintain phase
  • Chapter 7: Australia
  • 7.1. Defining an intra-group financing policy
  • 7.1.1. General considerations
  • 7.1.2. Documentation requirements
  • 7.1.3. Impact of the COVID-19 pandemic
  • 7.2. Treasury function
  • 7.2.1. Intra-group loans
  • 7.2.1.1. Loan or equity
  • 7.2.1.2. Profit participating loans
  • 7.2.1.3. Interaction between thin capitalization and TP legislation.
  • 7.2.2. Arm's length interest rate
  • 7.2.2.1. Interest charged
  • 7.2.2.2. TP methods
  • 7.2.3. Cash pooling
  • 7.2.3.1. Interest
  • 7.2.3.2. Remuneration CPL
  • 7.2.3.3. Allocation of cash pool benefit
  • 7.2.3.4. Documentation
  • 7.2.3.5. Advance pricing agreements (APAs)
  • 7.2.4. Hedging
  • 7.3. Financial and performance guarantees
  • 7.3.1. A parent guaranteeing the debt of a wholly owned group company that is unable, on a stand-alone basis, to borrow the debt funding it needs
  • 7.3.2. A parent or offshore associate provides debt funding to a group company that has the financial strength to be able to borrow the debt funding it needs without support from its parent company
  • 7.3.3. A parent company funding a subsidiary that is unable to borrow the funds it needs on a stand-alone basis
  • 7.3.4. A parent company provides a guarantee to a subsidiary that is able to borrow the funds it needs on a stand-alone basis, to allow the subsidiary to access funding at the lower cost available to the parent
  • 7.3.5. TP methods
  • 7.3.6. Use of range of results
  • 7.3.7. Requirement for outcomes to make commercial sense
  • 7.4. Factoring
  • 7.5. Captive insurance
  • 7.6. Leasing
  • 7.7. Other forms of financing and credit risk arrangements
  • Chapter 8: Brazil
  • 8.1. Defining an intra-group financing policy
  • 8.1.1. Documentation
  • 8.1.2. Impact COVID-19 pandemic
  • 8.1.3. Best practices
  • 8.2. Treasury function
  • 8.2.1. Intra-group loans
  • 8.2.1.1. Loan or equity
  • 8.2.1.2. Profit participating loans
  • 8.2.1.3. Interaction between thin capitalization and TP legislation
  • 8.2.2. Arm's length interest rate
  • 8.2.2.1. Interest charged
  • 8.2.2.2. TP methods
  • 8.2.3. Cash pooling
  • 8.2.3.1. Interest
  • 8.2.3.2. Remuneration CPL
  • 8.2.3.3. Allocation of cash pool benefit
  • 8.2.3.4. Documentation
  • 8.2.3.5. Advance pricing agreements (APAs).
  • 8.2.4. Hedging
  • 8.3. Financial and performance guarantees
  • 8.3.1. A parent guaranteeing the debt of a wholly owned group company that is unable, on a stand-alone basis, to borrow the debt funding it needs
  • 8.3.2. A parent or offshore associate provides debt funding to a group company that has the financial strength to be able to borrow the debt funding it needs without support from its parent company
  • 8.3.3. A parent company funding a subsidiary that is unable to borrow the funds it needs on a stand-alone basis
  • 8.3.4. A parent company provides a guarantee to a subsidiary that is able to borrow the funds it needs on a stand-alone basis, to allow the subsidiary to access funding at the lower cost available to the parent
  • 8.3.5. TP methods
  • 8.3.6. Use of range of results
  • 8.3.7. Requirement for outcomes to make commercial sense
  • 8.4. Factoring
  • 8.5. Captive insurance
  • 8.6. Leasing
  • 8.7. Other forms of financing and credit risk arrangements
  • Chapter 9: Canada
  • 9.1. Defining an intra-group financing policy
  • 9.1.1. General transfer pricing framework
  • 9.1.2. Specific considerations for intra-group financing transactions
  • 9.2. Treasury function
  • 9.2.1. Intra-group loans
  • 9.2.1.1. Loan or equity
  • 9.2.1.2. Profit participating loans
  • 9.2.1.3. Interaction between thin capitalization and TP legislation
  • 9.2.2. Arm's length interest rate
  • 9.2.2.1. Interest charged
  • 9.2.2.2. TP methods
  • 9.2.3. Cash pooling
  • 9.2.3.1. Interest
  • 9.2.3.2. Remuneration CPL
  • 9.2.3.3. Allocation of cash pool benefit
  • 9.2.3.4. Documentation
  • 9.2.3.5. Advance pricing agreements (APAs)
  • 9.2.4. Hedging
  • 9.3. Financial and performance guarantees
  • 9.3.1. A parent guaranteeing the debt of a wholly owned group company that is unable, on a stand-alone basis, to borrow the debt funding it needs.
  • 9.3.2. A parent or offshore associate provides debt funding to a group company that has the financial strength to be able to borrow the debt funding it needs without support from its parent company.

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