Tag: Comfort letter

A comfort letter is a business document that is intended to assure the recipient that a financial or contractual obligation with another party can and will be met. In the context of transfer pricing the sender is often the parent company of the group. See also guarantee.

Korean vs Guarantee fees Corp, October 2015, Korean Court, Case No 2014구합65806

Korean vs Guarantee fees Corp, October 2015, Korean Court, Case No 2014구합65806

Up until 2015 it had been the practice of the Korean tax authorities to issue tax assessments to Korean parent companies for providing guarantees to foreign subsidiaries without receiving appropriate arm’s-length guarantee fees. To that end, the Korean tax authorities had developed a credit assessment model. In this case the court ruled on the appropriatenes of this model. The court decided that the model was inappropriate due to: (1) Availability of the data used (2) Usage of domestic corporate bankruptcy rate (3) Disregard of industry-specific and non-financial information, implied warranties and local factors. Click here for translation Korea vs Guarantee fee corp 21 October 2015 ... Continue to full case