In that situation, the analysis under Chapter I may indicate that an independent enterprise borrowing under the same conditions as Company D would not be expected to pay a guarantee fee of 3% to Company M for the provision of the explicit guarantee since Company D is better off in the absence of the guarantee.
TPG2022 Chapter X paragraph 10.186
Posted on | By OECD
Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter X: Transfer Pricing Aspects of Financial Transactions | Tag: Example - financial guarantees, Example 1 - implicit support, Financial guarantee, Financial transactions, Implicit support/guarantee, Loan guarantee, Options realistically available, Treasury functions
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