Transfer prices for financial transactions of non-banking subjects

Who are the intended participants?

• Members of management who are setting up or considering changing their entity’s financing on a group level.
• Tax and accounting specialists who want to gain a better understanding of the tax effects of financial transactions from a transfer pricing and income tax perspective.

Programme

• How will the BEPS (Base Erosion and Profit Shifting) Action Plan change the view on transfer pricing for financial transactions?
• In our experience, how do tax administrators approach financial transactions?
• Interest rates, loans and credits: how to set interest rates, what influences them the most and what sources of information should be used?
• What is an entity´s credit rating and how does it influence the setting of interest rates?
• Interest-free loans: the tax authorities´ approach prior to 1 January 2014 and now.
• Cash pooling: when to agree to it, how to set it up, how to set interest rates. What are its pitfalls?
• Warranties: what different types are there and is it necessary to pay for the provision or receipt of a warranty?
• What further effects do financial transactions have on income taxes? Thin capitalisation, application of withholding tax.
• Actual examples from our practice.

Benefits

After completion of the course, you will be able to:

• Assess the level of interest rates commonly used on the market (at arm’s length).
• Defend cash pool models and thus find out whether they would stand up to the scrutiny of the tax administrator.
• Expose the shortcomings and risks of financial transactions not only from a transfer pricing perspective.