In conducting a credit rating analysis, it is important to note that the financial metrics may be influenced by current and past controlled transactions (such as sales, or interest expenses). If it appears that such controlled transactions are not in accordance with the arm’s length principle, the credit rating derived in light of such intra-group transactions may not be reliable. (See also guidance in section B). These considerations apply both to controlled transactions that may affect the current earnings of the MNE and to previous funding and other intra-group transactions that may have had an impact on the measures of income and capital of the MNE that are the subject of quantitative analysis.
TPG2022 Chapter X paragraph 10.75
Posted on | By OECD
Category: OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter X: Transfer Pricing Aspects of Financial Transactions | Tag: Credit rating, Credit rating analysis, Effect of intra-group transactions on credit ratings, Financial transactions, Intra-group loan, Loan, Treasury functions, Use of credit ratings
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