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The transfer pricing of financing transactions: OECD guidance

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Following a July 2018 consultation paper the OECD will soon publish long-awaited guidance on how transfer pricing analysis of financing arrangements should be undertaken. Many principles will not be new to UK taxpayers given HMRC practice and guidance although the new OECD guidance concerning the recognition of guarantees could give rise to a change in UK legislation. Greater focus is expected on the risk management within and economic rationale for a finance structure that could cause some practical challenges with pricing. The likelihood of tax enquiries internationally in relation to this subject will increase as tax authorities are emboldened by the consensus implied by the adoption of the new guidance and the greater clarity to transfer pricing in this area that it brings in risk assessment. We speculate that there could also be guidance given on the comparison of secured and unsecured facilities in particular where...
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