Financial transactions and treasury transfer pricing
Arm’s length support for intercompany loans, cash pooling, guarantees and group financing.
Intercompany financing is a high-priority area for many tax authorities. We help clients analyse, price and document loans, cash pools, guarantees and other treasury arrangements in line with the arm's length principle and practical treasury needs.
Why this matters
Financial transactions require a detailed understanding of both the contractual terms and the economic reality of the arrangement. Tax authorities may challenge interest rates, credit ratings, debt capacity, implicit support, guarantee fees, cash pool remuneration and the allocation of treasury benefits. Robust analysis is particularly important where financing balances are material or where market conditions have changed.
How we help
- Delineate the transaction: analyse contractual terms, actual conduct, funding needs, credit risk and the role of treasury or cash pool leaders.
- Assess borrower credit profile: support credit rating, debt capacity and implicit support considerations where relevant.
- Price intercompany loans: perform loan benchmarking using market data, yield curves, credit spreads and comparable debt instruments where available.
- Analyse guarantees: assess whether a guarantee creates measurable benefit and support the pricing of guarantee fees.
- Review cash pooling: analyse cash pool mechanics, leader remuneration, participant pricing and allocation of cash pool benefits.
- Document and implement policies: prepare policy notes, benchmark reports, intercompany agreements and practical pricing instructions.
Typical deliverables
- Loan benchmarking reports
- Credit rating and debt capacity support
- Guarantee fee analyses
- Cash pooling transfer pricing analysis
- Treasury TP policy and implementation support
- Intercompany financing agreements
- Audit defence support for financial transactions
Typical triggers
- New or refinanced intercompany loans
- Material and structural cash pool balances
- Guarantees or comfort letters
- Interest rate changes or volatile market conditions
- Treasury centralisation
- Tax audit questions on interest deductions or financing margins
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