Our global breadth and country-level depth as a financial transactions transfer pricing (FTTP) network provides us with the tools and experience to deliver tailored, sustainable solutions in a dynamically changing global FTTP environment.
Financial transactions are often the most extensive and material transactions within multinational groups. These transactions are central to getting funding across the multinational group and service liquidity provision, long term funding, and other operational and tax needs. In conjunction with revisions made to the OECD Guidelines, greater scrutiny has been placed on the economic substance of these transactions, the options realistically available to the counterparties, and the ability/capacity to bear risk within entities of a multinational enterprise.There has also been a significant shift in the way in which tax authorities have sought to analyse and challenge intercompany loan, guarantee, cash pooling and other financial transactions from a transfer pricing perspective.
At the PwC Global TP Conference in London (Oct, 2017), Krishnan Chandrasekhar a PwC U.S. Partner and the Global FT leader, Dan Pybus, a PwC UK Director, and Loic Webb-Martin, a PwC UK, Partner and the UK FT leader discuss the latest trends in TP Financial Transactions.
PwC’s global FTTP network is highly experienced and committed to supporting clients in navigating the complexity of this changing environment, providing support around the entire life-cycle of intercompany treasury activity, including:
We provide assistance in the evaluation of alternative global treasury models, evaluating your specific facts and helping design sustainable transfer pricing policies for intercompany financing transactions. Drawing on our multinational expertise and networks, including in collaboration with our Advisory Treasury teams, we are able to devise practical funding structures, across all liquidity types, through which clients are able to apply technically compliant methodologies in a manner which does not require unnecessary complexity in their implementation.
Throughout the corporate life cycle there is a need to ensure that finance is available to fund key transactions (e.g. acquisitions and significant capital expenditure). We are able to offer tailored solutions with respect to sizing (level of debt and capital structure) and pricing (appropriate terms and conditions and rates) such financing transactions, often working closely alongside our Debt Advisory practice.
As territories move towards compliance with the revised transfer pricing documentation guidance, clients are requiring specific assistance in complying with the requirements to summarise the key intercompany financing policies under the Master File and the specific transactions and intercompany prices per the Local File. Through our detailed understanding of the rules and requirements, including local country nuances, we are able to deliver compliant, comprehensive documentation in a cost effective manner.
Given uncertainty in the global FTTP landscape, a priority of our clients more recently has been to obtain certainty with respect to the transfer pricing of their financial transactions (taking the form of either unilateral or bilateral negotiations with tax authorities). Drawing on our experience in negotiating such agreements with a large number of international tax authorities, we are able to ensure efficiency and timeliness throughout the negotiation process.
We have seen a significant increase in cases in relation to FTTP over the course of the last ten years, all of which have shaped the way in which tax authorities, and more broadly the OECD, today have sought to assess these transactions. We have experience in assisting clients in the defense of their technical positions under audit challenge, and work closely alongside our Tax Dispute Resolution network more broadly to leverage the broadest possible array of knowledge to assist with negotiations.
Financial Transactions Transfer Pricing Leader, Global Tax and Legal Services, PwC Belgium
Financial Transactions Transfer Pricing Leader, EMEA, PwC United Kingdom
Tel: +44 (0)20 7213 1359