TPG2022 Chapter X paragraph 10.46

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Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter X: Transfer Pricing Aspects of Financial Transactions | Tag: , , , ,
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Similarly, the treasury may act as the contact point to centralise the external borrowing of the MNE group. External funds would then be made available within the MNE group through intra-group lending provided by the treasury. On prevailing facts and circumstances, guidance in paragraph 1.188 of Chapter I would apply to these situations and the treasury would be expected to receive an arm’s length fee for its coordination activities.

Related Guidelines

TPG2022 Chapter X paragraph 10.50The following sections outline the transfer pricing considerations which arise from some relevant treasury activities that are often performed within MNE groups, i.e. the provision of intra-group loans, cash pooling, and hedging activities....
TPG2022 Chapter X paragraph 10.49The activities of the treasury function take into account issues at a group level and follow the vision, strategy and policies set out by MNE group management. Accordingly, the approach of the treasury to risk will depend on the MNE group’s policy where certain objectives may be specified, such as...
TPG2022 Chapter X paragraph 10.48Another key concern regarding treasury activities is the identification and allocation of the economically significant risks in accordance with Chapter I....
TPG2022 Chapter X paragraph 10.47In other situations, the treasury may be found to perform more complex functions and, therefore, it should be compensated accordingly....
TPG2022 Chapter X paragraph 10.45Generally, the treasury function is part of the process of making the financing of the commercial business of the MNE group as efficient as possible. As such, the treasury function will usually be a support service to the main value-creating operation as in the case, for example, of the services...
TPG2022 Chapter X paragraph 10.44When evaluating the transfer pricing issues related to treasury activities, as with any case, it is important to accurately delineate the actual transactions and determine exactly what functions an entity is carrying on rather than to rely to any extent upon a general description such as “treasury activities”....
TPG2022 Chapter X paragraph 10.43Other examples of activities which the treasury may have responsibility for include raising debt (through bond issuances, bank loans or otherwise) and raising equity, and managing the relationship with the MNE group’s external bankers and with independent credit rating agencies....
TPG2022 Chapter X paragraph 10.42Whilst the treasury’s cash and liquidity management function is concerned with day-to-day operations, corporate financial management is concerned with development of strategies and planning for investment decisions in the longer term. Financial risk management requires identification and analysis of, and responses to, the financial risks to which the business is...
TPG2022 Chapter X paragraph 10.41A key function of a corporate treasury may be, for example, to optimise liquidity across the MNE group to ensure that the business has sufficient cash available and that it is in the right place when it is needed and in the right currency. In general, efficient management of MNE...
TPG2022 Chapter X paragraph 10.40The organisation of the treasury will depend on the structure of a given MNE group and the complexity of its operations. Different treasury structures involve different degrees of centralisation. In the most decentralised form, each MNE within the MNE group has full autonomy over its financial transactions. Decentralised treasury structures...