07 Jan 2021Professional Services
Financial transactions are often the most extensive and material transactions within multinational groups. These transactions are central to financing multinational groups and service liquidity provision, long-term funding, and other operational and tax needs. While many companies raise money on the capital markets but are on the lookout to efficiently capitalize their businesses around the globe. Over the last few years, a recently increased focus on the transfer pricing of financial transaction is driving a new phase of tax disputes. However, there are emerging trends in the consistency of treatment between jurisdictions, despite the work of the Organisation for Economic Co-operation and Development (OECD) to address this complex issue. Financial transactions are an important part of the operating procedures of MNEs to support their value creation process. Owing to the growing needs of financing as well as additional guidance issued, in an intra-group situation, consideration of the tax consequences of the financial transactions assumes greater importance.