On February 11th, 2020 the OECD released the technical guidance on the transfer pricing aspects of financial transactions (FTs), which are now included as a new chapter X in the 2022 OECD transfer pricing guidelines, thus formalizing the relevant transfer pricing elements to consider in ensuring that FTs are priced at arm’s length. Most of them are far from being new, as in 2010 the OECD released the well-known “Report On The Attribution Of Profits To Permanent Establishments” which empathized the importance of what would have become the “accurate delineation of the financial transaction”, which should begin with the identification of the economically relevant characteristics of the transaction, such as the examination of the contractual terms, the functions performed, the characteristics of the financial instrument, the economic circumstances and the business strategy pursued by the parties.

Andersen's EU Transfer Pricing department has prepared a document with the most relevant and common TFs identified in the OECD guidance.

Read the full article here.