Summary: Parental corporate guarantees are common intercompany transactions. Recently, tax and regulatory have been quite vigilant about these transactions and have been scrutinizing these transactions more closely. Unlike intercompany loans, pricing guarantees can be specifically tricky, given that in these transactions, a compensation is warranted only if there is a specific benefit conferred to the recipient. That more often than not is not so straightforward. Besides, there is always a risk of given default for the guarantor. The OEDC paper on transfer pricing of financial transactions, issued in February 2020 as part of the BEPS inclusive framework, gives some valuable insights. Explore the latest developments in this important area of transfer pricing and how your organization might need to respond.(Live presentation was aired on 25 February 2020)
