Synopsis:
Transfer pricing audits by tax authorities have matured over the years and progressed beyond challenging just the arm’s length pricing of intercompany transactions (e.g. interest rate applied on an intercompany loan). Increasingly, the challenges revolve around the arm’s length circumstances and whether intercompany transactions have commercial substance. In some cases, tax authorities have even seek to disregard the intercompany transactions and reconstruct the arrangement in accordance to what independent enterprises would agree to enter into.
As such, taxpayers should proactively manage transfer pricing risks at the time of entering into intercompany financing arrangements and ensure that the desired arrangements would satisfy commercial rationality or are aligned to industry practices.
This module seeks to provide an overview of recent international transfer pricing cases and highlight some of the key considerations and potential pitfalls when entering into intercompany financing arrangements.
Intended For:
This module is relevant to financial controllers, accountants, auditors, tax and finance professionals who are involved in various aspects of intercompany financing transactions.
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