This site uses cookies. and this alert will appear once and then not again.

On 3 July 2018, the OECD released their ​BEPS discussion draft on the transfer pricing aspects of financial transactions. The paper focuses on ​​the accurate delineation of financial transactions under Chapter I of the OECD Guidelines. The paper also targets specific issues related to the pricing of financial transactions such as treasury function, intra-group loans, cash pooling, hedging, guarantees and captive insurance. Details as to what is covered in each chapter is provided below, along with a link to the paper.

  • Interaction of guidance in Section D1 of Chapter 1 of the OECD Guidelines (in particular risks associated with a transaction and accurate delineation) in the context of funding
  • Treasury functions - covering intra-group loans (and their underlying terms / the relevance of those terms), cash pooling (structures, pricing and delineation) and hedging
  • Guarantees - covering specifically financial guarantees (definition of explicit / implicit / cross guarantees, the pricing of guarantees and examples)
  • Captive insurance - covering the rationale for captive arrangements, fronting arrangements, determining the appropriate pricing for premiums / return on capital / factoring in synergies and agency sales

Here is the link to the paper.