The Organisation for Economic Cooperation and Development (OECD) today released a discussion draft on the transfer pricing aspects of financial transactions.
The OECD’s discussion draft on financial transactions [PDF 1.1 MB] concerns a follow-up to base erosion and profit shifting (BEPS) Actions 8-10 (Assure that transfer pricing outcomes are in line with value creation). The 2015 report on BEPS Actions 8-10 mandated follow-up work on the transfer pricing aspects of financial transactions. Under that mandate, the discussion draft released today is intended to clarify the application of the principles included in the 2017 edition of the OECD Transfer Pricing Guidelines—in particular, the accurate delineation analysis under Chapter I to financial transactions. Also addressed are specific issues related to the pricing of financial transactions such as treasury function, intra-group loans, cash pooling, hedging, guarantees, and captive insurance.
As noted in today’s OECD release, comments on the discussion draft are requested by 7 September 2018.
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