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Does the OECD discussion draft on transfer pricing for financial transactions pose more questions than it answers?

OECD discussion draft on transfer pricing

On 3 July 2018 the OECD published a discussion draft on the transfer pricing of financial transactions. The draft provides additional transfer pricing guidance on several types of financial transactions and asks numerous questions of commentators.

Daniel Head

Partner, National Head of Transfer Pricing in the UK

KPMG in the UK


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You can find the discussion draft here.

Key topics discussed in the draft include:

  • The application of the principles contained in the OECD Guidelines to transfer pricing of financial transactions;
  • Economically relevant characteristics that should be considered when analysing the terms and conditions of financial transactions; and
  • Specific transfer pricing issues related to treasury functions, intra-group loans, cash pooling, hedging, guarantees and captive insurance.

Key themes arising throughout the draft include:

  • The importance of accurate delineation of the actual transaction in advance of considering the pricing;
  • A focus on two sided analyses and consideration of options realistically available; and
  • The concept of implicit group support needing to be taken into account in almost all cases.

Download our report for a more detailed look at the key topics covered by the discussion draft, the questions raised and our opinion on the proposed guidance.


For further information please contact: 

Daniel Head

UK Head of Transfer Pricing, KPMG in the UK


Aron Elsey

Senior Manager, Transfer Pricing

KPMG in the UK


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