Commentary

B4.149 Transfer pricing—overview of financing arrangements

Business tax
Business tax | Commentary

B4.149 Transfer pricing—overview of financing arrangements

Business tax | Commentary

B4.149 Transfer pricing—overview of financing arrangements

Transfer pricing rules also apply to financing arrangements1, this could be where an intra-group loan exceeds the amount a borrower could have borrowed from an independent third party and also where the terms of an intra-group loan differ from those that would have been agreed between independent parties eg a higher interest rate.

The OECD have issued their Transfer Pricing Guidance on Financial Transactions in February 2020 and this is summarised in B4.150A, the HMRC guidance on financing arrangements is summarised in B4.150.

The transfer pricing rules can only apply if at the time of the making or imposition of the actual provision between the two affected persons:

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