An Italian property rental company transferred funds to its Luxembourg parent at a 2% interest rate, which the Italian tax authority challenged as below market, asserting 4.3% was arm's length. The Regional Tax Commission of Lazio annulled the assessments, finding the 2% rate justified by market indicators. Italy's Supreme Court upheld that decision in 2026, confirming the tax authority had not sufficiently proved the rate was non-arm's length ... Read more

Delmonte Kenya, an integrated pineapple producer and exporter, argued it should be characterised as a routine cost-plus producer with residual profits attributed to foreign group entities. The Kenya Revenue Authority challenged the pricing, functional characterisation, and documentation, asserting Delmonte Kenya bore key risks and created core value. The Tax Appeal Tribunal ruled in favour of the tax authority in January 2026, rejecting the taxpayer's tested party selection and benchmarking approach ... Read more

EDF International subscribed to convertible bonds issued by its wholly owned UK subsidiary at a low coupon rate. French tax authorities argued the rate was below arm's length for straight debt and that the conversion feature had no value to an existing sole shareholder, characterising the benefit as a hidden profit distribution subject to withholding tax. France's Conseil d'État upheld the tax authority's position in December 2025 ... Read more

SEACOM Tanzania received TZS 5.4 billion from its related party, recording the funds as intercompany payables and arguing they constituted operational support rather than a loan. The Tanzania Revenue Authority reclassified the balances as intra-group financing and levied 10 percent withholding tax on deemed interest. The Tax Revenue Appeals Board, Tribunal, and Court of Appeal all upheld the recharacterisation and the resulting withholding tax assessment ... Read more

Bulgaria's Supreme Administrative Court ruled in November 2025 in favour of the tax authority, confirming transfer pricing adjustments applied to Lukoil Bulgaria. Authorities found wholesale fuel prices paid to Lukoil Neftohim Burgas were above market levels based on EBIT margin analysis, and that the interest rate on a USD 150 million intra-group loan was not arm's length due to undisclosed guarantees, treating excess charges as hidden profit distributions ... Read more

A Danish holding company claimed interest deductions on a DKK 100 million promissory note arising from a series of share transfers in a foreign company among related parties. The tax authority disallowed DKK 6,462,734 of taxable income, finding the transactions lacked commercial substance. Denmark's Tax Tribunal upheld the assessment in 2025, concluding the arrangements were artificial and only possible due to overlapping ownership, with no genuine financial risk assumed by the purchasing companies ... Read more

A Spanish subsidiary of a multinational consumer goods group was audited for 2015–17 over contract manufacturing services, intra-group loans, and cash pooling arrangements. The tax authority rejected part of the taxpayer's comparable set and adjusted margins to the median, also applying group credit ratings and substituting Euribor with Eonia. Spain's TEAC largely upheld the authority's position in its October 2025 ruling ... Read more

A Portuguese subsidiary of a German multinational participated in euro and US dollar cash pooling arrangements and held shareholder loans, paying higher rates on debit balances than it received on credit balances. The Tax Authority disallowed part of the interest expense using Bank of Portugal statistical averages as CUP comparables. The CAAD ruled in favour of the taxpayer in 2025, rejecting those averages as insufficiently comparable ... Read more

Umicore Argentina received intercompany loans from a related foreign entity to fund local operations. The Argentine tax authority recharacterised the loans as disguised capital contributions due to prolonged non-repayment, denying interest and foreign exchange loss deductions. The National Tax Court ruled in favour of the taxpayer in 2025, finding that non-repayment resulted from Argentina's exchange controls, not the parties' intent, and confirmed the deductions ... Read more

A Slovak agricultural company acting as both lender and borrower in intra-group loan arrangements charged interest at 0.6 per cent on loosely structured agreements with no fixed terms. The tax authority found this rate failed the arm's length standard given the borrowers' weak financial position and high credit risk, adjusted the rates using National Bank of Slovakia sector averages, and increased the corporate income tax base. The Administrative Court upheld the assessment in full ... Read more

A Belgian company financed a €16 million share acquisition partly via a 5% fixed-rate loan from its British parent. The tax authority applied the internal CUP method, using a concurrent ING bank loan as a comparable, and adjusted the arm's length rate to 3.32%. The Court of First Instance upheld the assessment in 2025, rejecting the taxpayer's external CUP study and confirming a 10% penalty for incorrect filing ... Read more

The Australian Taxation Office’s draft Practical Compliance Guideline PCG 2025/D2 explains how the ATO assesses the tax risk of inbound cross-border related-party financing arrangements and the factors it takes into account. It also sets out the compliance framework the ATO follows when determining the appropriate interest rate or other pricing for such arrangements. Because the document is still in draft form, it has no effect until it is finalised. When issued, it will apply exclusively to inbound cross-border related-party financing arrangements ... Read more

31 May 2025 the Dutch tax authorities issued transfer pricing guidance on guarantee fees. The memo addresses the assessment of the tax consequences of the provision of guarantees by a group entity, usually the ultimate holding company, to another group company in the group. Click here for Unofficial English translation Click here for other translation ... Read more

Argentina's tax authority AFIP recharacterised long-term parent-company loans received by Compañía de Transmisión del Mercosur S.A. as capital contributions, denying interest and exchange loss deductions under the economic reality principle. The Administrative Court of Appeal upheld the Tax Court's decision in favour of the taxpayer, finding consistent repayments and documented records disproved simulation, ruling that loan restructuring alone cannot justify reclassification as equity ... Read more

A Colombian company had interest deductions on loans from a British Virgin Islands related party disallowed after tax authorities found its transfer pricing documentation deficient. The taxpayer relied solely on US corporate bond comparables, which authorities rejected as insufficiently similar. Colombia's Supreme Administrative Court upheld the adjustments in 2025, finding the taxpayer failed to disprove the authority's findings or demonstrate flaws in the comparability analysis ... Read more

Following a tax authority audit, Coca-Cola HBC Česko a Slovensko challenged additional assessments relating to intra-group loans reclassified as equity, denied interest deductions, and disputed management service cost allocation keys. The company also raised procedural objections regarding new analyses introduced at appeal stage. The Slovak Administrative Court ruled in favour of the taxpayer in May 2025 ... Read more

A Norwegian oil and gas company granted a loan to a foreign group entity and applied an interest rate supported by benchmarking. The tax authority rejected the selected comparables as insufficiently comparable and adjusted 2016 income upward. After the court of first instance ruled for the taxpayer, the Court of Appeal reversed, finding methodological weaknesses in the benchmarking and confirming the adjustment as the taxpayer had not met its burden of proof ... Read more

A Tanzanian bank disputed tax assessments disallowing its interest in suspense treatment and bad debt write-offs for 2012 to 2014. The tax authority required accrual-basis recognition of interest and strict proof of uncollectability, including board resolutions and evidence of recovery efforts. The Tax Revenue Appeals Board and Tribunal both ruled against the bank. Tanzania's Court of Appeal upheld those decisions in 2025, finding the bank had not sufficiently demonstrated the loans were irrecoverable ... Read more

An Austrian holding company claimed interest deductions on a €12.4 million intra-group loan used to acquire shares in a subsidiary, plus interest on grants to Spanish and Italian subsidiaries. The tax authority disallowed the deductions, alleging abuse and lack of beneficial ownership. The Austrian Federal Finance Court ruled in 2025 that the loan was arm's length, properly documented, and not abusive, deciding mostly in favour of the taxpayer ... Read more

An Italian company paid interest to a Luxembourg finance vehicle and claimed withholding tax exemption under EU Directive 2003/49/EC. Italian tax authorities denied the exemption, arguing the Luxembourg entity was a conduit lacking beneficial ownership. The Supreme Court dismissed the authorities' appeal in February 2025, applying a three-step beneficial ownership analysis focusing on contractual obligations, functional substance, and OECD-benchmarked margins ... Read more

A Swiss real estate company received an intra-group loan from an Irish related party at an interest rate later found to exceed the arm's length safe-harbour rate, creating a hidden dividend distribution subject to withholding tax. The company's controller failed to declare the liability within the statutory deadline. Switzerland's Federal Supreme Court upheld a CHF 8,000 criminal fine in 2025, confirming the controller acted with at least conditional intent to evade withholding tax ... Read more

A French holding company granted interest-free loans totalling over €35 million to four Romanian wind energy subsidiaries between 2011 and 2014. The tax authorities treated the absent interest as indirect profit distributions abroad. The Conseil d'État ruled in December 2024 that the burden of proof rested on the taxpayer to demonstrate the administration's applied interest rates were excessive, deciding in favour of the tax authority ... Read more

A Dutch company deducted 10% interest on shareholder loans, but the tax authority challenged the rate as non-arm's length and the loans as non-businesslike. The Amsterdam Court of Appeal upheld the authority's position in 2024, reducing the interest rate to 2.43% using a suretyship approach and treating the excess deducted interest as a deemed dividend distribution to shareholders ... Read more

12 December 2024, the German Federal Ministry of Finance published updated administrative principles on transfer pricing 2024 (VWG VP 2024). The updates mainly concern the chapter on financial transactions, where paragraphs 3d and 3e have recently been added to the AStG. Paragraph 3d concerns the determination of arm’s length interest rates, group or stand-alone rating and whether capital should be treated as a loan or equity, and paragraph 3e concerns the treatment of financing arrangements, i.e. cash pools, hedging, etc. New guidance is also provided on the application of OECD Pillar 1 – Amount B. Click here for an unofficial English Translation ... Read more

Singapore Telecom Australia Investments issued USD 5.2 billion in loan notes to a Singapore-resident related party at a 13.2575% interest rate. Australian tax authorities disallowed approximately USD 894 million in interest deductions across four income years, finding the terms departed from the arm's length principle. The Federal Court and Full Federal Court upheld the assessment. In October 2024, the High Court of Australia refused the taxpayer's application for special leave to appeal ... Read more

A French tax group headed by Howmet SAS borrowed funds from a Luxembourg group entity's Swiss permanent establishment and contributed them to a Belgian affiliate. The French tax authorities disregarded the arrangement as an abuse of rights. The Conseil d'État, in July 2024, upheld the Paris Administrative Court of Appeal's decision, confirming the arrangement was wholly artificial and served no purpose beyond avoiding tax ... Read more

Costa Crociere's agency agreement with its Brazilian subsidiary was recharacterised as a loan by Italian tax authorities, who applied LIBOR-based transfer pricing adjustments to impute interest income of approximately €40 million. The Italian Supreme Court found that lower courts had inadequately analysed the transaction's economic substance and the risks borne by each party, remanding the case to the Liguria Regional Tax Commission for detailed reassessment in 2024 ... Read more

A Swiss subsidiary paid 2.5–3% interest on intra-group loans from its parent, but the Zurich Tax Office assessed the arm's length rate at 1.08%, treating the excess as a hidden distribution. The Federal Supreme Court upheld the tax authority's approach in 2024, largely confirming that safe harbour rates and actual borrowing costs constrain acceptable intra-group interest, resulting in additional cantonal tax assessments for 2014 and 2015 ... Read more

A Polish company deducted interest on intra-group loans and management fees paid to a related Delaware entity for FY 2015. The tax authority denied both deductions, arguing the loans were artificial tax-avoidance arrangements and the management fees lacked sufficient substance. Poland's Supreme Administrative Court ruled in favour of the taxpayer, overturning the assessment in this 2024 decision ... Read more

A Norwegian subsidiary financed by a Luxembourg parent was denied full interest deductions under Norway's 2015 intra-group interest limitation rule. The Supreme Court, following a 2022 EFTA Court advisory opinion, ruled that the limitation combined with group contribution rules unlawfully restricted EEA freedom of establishment. The court held the rule unjustifiable without allowing the company to demonstrate commercial motivation for the loan, deciding in the taxpayer's favour ... Read more

A Peruvian company provided USD 8.3 million to a Luxembourg group entity, characterising the transactions as deposits and applying interest rates of 2.3%–4.6%. The tax authorities recharacterised the arrangements as loans and assessed additional taxable income using higher Peruvian lending rates. Peru's Tax Court upheld the loan characterisation but revised the arm's length range to 5.14%–6.46%, resulting in a partially reduced assessment in 2024 ... Read more

Willink SAS issued two intercompany convertible bonds at an 8% annual interest rate, which French tax authorities challenged as exceeding the arm's length rate. After the Conseil d'État endorsed RiskCalc as a sufficiently reliable credit rating tool and remanded the case, the Paris Administrative Court of Appeal annulled the tax assessment in 2024, ruling that Willink demonstrated its interest rate was consistent with arm's length conditions ... Read more

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

A Dutch company deducted 10% interest on shareholder loans, but the tax authority challenged the rate as non-arm's length and the loans as non-businesslike. The Netherlands Court of Appeal upheld the tax authority's position in 2024, finding no independent third party would lend on such terms. Applying a deemed guarantee approach, the court set the arm's length rate at 3.09% and recharacterised the excess interest payments as deemed dividends ... Read more

A UK group restructured intra-company balances to accelerate tax loss utilisation, creating an intra-group loan. HMRC disallowed interest deductions under the unallowable purpose rule in section 441 CTA 2009, arguing tax avoidance was the main purpose. The Court of Appeal upheld decisions of the First-tier and Upper Tribunals in 2024, confirming the rule applied and dismissing Kwik-Fit's appeal ... Read more

A Peruvian company received funds from related parties abroad, classifying them as equity and paying no interest. The tax authority reclassified the funds as loans and assessed withholding tax on imputed interest using the CUP method. The Tax Court agreed on the loan classification and CUP as the most appropriate method, but overturned the adjustment in 2024 due to an inadequate comparability analysis ... Read more

ING Bank SPA charged 3.90% interest on a loan to a Dutch group company, but Italian tax authorities assessed the arm's length rate at 6.81%. After the Regional Tax Commission upheld the adjustment, Italy's Supreme Court remanded the case in 2024, finding the lower court had failed to adequately explain why the tax authority's rate arguments were decisive over competing evidence, including Bank of Italy rates and coeval intra-group financing rates ... Read more

Hargreaves Property Holdings paid interest on intra-group loans between 2010 and 2015 without deducting withholding tax. HMRC challenged this treatment, and the First-tier and Upper Tribunals both ruled against the taxpayer. The UK Court of Appeal dismissed the further appeal in April 2024, confirming that the recipient company was not beneficially entitled to the interest and that the loans constituted yearly interest subject to withholding tax obligations ... Read more

BlackRock's UK subsidiary claimed interest deductions on $4bn intra-group loans used to fund the 2009 acquisition of Barclays Global Investors. HMRC denied relief under UK transfer pricing rules and the unallowable purpose rule. The Court of Appeal ruled in favour of HMRC in 2024, finding that an arm's length lender would not have made the loans on those terms and that a tax advantage purpose was dominant ... Read more

Following a tax audit covering FY 2013 and 2014, French authorities challenged GEII Rivoli Holding's deduction of intra-group interest at 5.08%, above the statutory safe harbour rate of 2.79%. The company justified the rate using Moody's RiskCalc and S&P corporate bond yield curves. The Conseil d'État rejected the RiskCalc approach but accepted the S&P yield curve analysis, setting aside the additional corporate income tax assessments ... Read more

SAP France, a subsidiary of the German SAP group, deposited funds under a Cash Management Agreement at 0% interest. The French tax authorities challenged this as an abnormal act of management and added imputed interest to taxable income. After a referral from the Supreme Court, the Court of Appeal of Versailles in 2024 upheld the tax authority's adjustment, confirming that arm's length remuneration was required on the sight deposits ... Read more

On 27 March 2024, new paragraphs (3d) and (3e) were added to the German Foreign Tax Act (Außensteuergesetz – AStG) regarding intragroup financing. Paragraph (3d) concerns the determination of arm’s length interest rates, group vs. stand-alone rating and whether capital is treated as a loan or equity. Paragraph (3e) concerns the treatment of financing arrangements, i.e. cash pools, hedging, etc ... Read more

A Dutch holding company deducted interest on intra-group acquisition loans in its 2011 corporate tax return. The tax authority disallowed the full deduction under Article 10a interest limitation rules and general anti-avoidance principles, arguing the arrangement was primarily tax-driven. The District Court and Court of Appeal sided largely with the tax authority. The Netherlands Supreme Court in 2024 found the taxpayer's principal appeal well-founded and partially reversed the Court of Appeal's judgment ... Read more

The Italian tax authorities assessed additional income on non-interest bearing loans granted by Sadepan Chimica S.R.L. to its foreign subsidiaries in Belgium and Luxembourg, applying notional rates of 3.83% and 5.32%. The taxpayer appealed, arguing authorities ignored specific financial conditions and misallocated the burden of proof. Italy's Supreme Court ruled in favour of the taxpayer in March 2024, finding the comparability analysis was insufficient ... Read more

A French company deducted a loss arising from a debt waiver granted to its German subsidiary, arguing the relief was commercially motivated. The tax authorities disallowed the deduction as an abnormal act of management. In March 2024, the CAA de Nantes upheld the disallowance, finding the taxpayer had not established a genuine commercial benefit or risk of harm to supplier relationships justifying the waiver ... Read more

Walmart Chile S.A. deducted costs for inter-group management, marketing, and advertising services, along with interest on an intra-group loan, in its 2014 and 2015 tax returns. The Chilean tax authority disallowed these deductions following an audit. The Tax Court largely sided with the authority, and the Court of Appeal upheld that decision in March 2024, confirming the disallowances due to insufficient documentation ... Read more

Singapore Telecom Australia issued USD 5.2 billion in loan notes to a Singapore-resident related party at a 13.2575% interest rate. The Australian Tax Office disallowed approximately USD 894 million in interest deductions across four income years, finding the rate breached the arm's length principle. The Federal Court upheld the assessment in 2021, and Australia's Full Federal Court dismissed the subsequent appeal in March 2024, confirming the tax authority's position ... Read more

A Polish company failed to withhold tax on interest paid to a Dutch group entity on loans funded through a chain of French, Luxembourg, US, and Canadian affiliates. The tax authority determined the Dutch company was merely an intermediary and not the beneficial owner, denying treaty and directive benefits. Poland's Supreme Administrative Court sided with the authority and remanded the case for re-examination in 2024 ... Read more

A Portuguese bank received a transfer pricing assessment after granting an interest-free loan to a subsidiary without charging arm's length interest. The tax authority applied the CUP method and imputed a market interest rate. The Tribunal Central Administrativo Sul dismissed the taxpayer's appeal in February 2024, upholding the adjustment and confirming that Article 58 of the CIRC correctly applied arm's length principles to the transaction ... Read more

A Polish company sought a binding ruling on the tax consequences of intra-group loan arrangements with its Luxembourg shareholder and Polish subsidiaries. The tax authority denied the request, finding the back-to-back structure was artificial and the Luxembourg entity acted merely as a passive intermediary. The Polish Administrative Court dismissed the appeal in January 2024, upholding the authority's position in full ... Read more