On 11 February 2020, the OECD published the “Transfer Pricing Guidance on Financial Transactions” document (hereinafter “Report”).
The Report, which will constitute the new chapter 10 of the OECD Transfer Pricing Guidelines, provides specific guidelines on how to apply the arm’s length principle for financial transactions.
The publication of the Report is of greater relevance in view of the period of crisis triggered by Covid-19.
As such, one of the main impacts for multinational groups concerns liquidity management.
In order to ensure full operability, companies need to manage their financial resources in the best possible way. This is performed by:
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taking actions by increasing the management efficiency of the receivable and payable accounts
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the utilisation of public support such as:
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tax measures (i.e. suspension of tax obligations, suspension of the terms of the activities of collection offices, tax credit)
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financial support measures (i.e. wage compensation funds, access to public sector subsidies to businesses)
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taking actions aimed at finding additional resources of private financing.
Published in: Crowe TP Wednesday - 03 June 2020