A Greek company applied an 8.5% interest rate on €18.5 million in related-party loans using the CUP method with stand-alone credit comparables. The tax authority reduced the rate to 2.92%, finding that implicit group support enhanced the company's creditworthiness. The Administrative Tribunal upheld the assessment in 2024, confirming that group membership and implicit support must be reflected when determining the arm's length interest rate ... Read more

Another key consideration would be the likely consequences for other parts of the MNE group of supporting or not supporting the borrower. The criteria used to determine the status of an entity in this regard may include such considerations as legal obligations (e.g. regulatory requirements), strategic importance, operational integration and significance, shared name, potential reputational impacts, negative effects on the overall MNE group, general statement of policy or intent, and any history of support and common behaviour of the MNE group with respect to third parties. The relative relevance of those factors may vary from one industry to another ... Read more