A subsidiary borrows from a third party at 1% to 2% and on-lends to its head office at a significantly higher interest rate. This arrangement resulted in its head office claiming a large interest deduction and the subsidiary earning a profit of over $1 billion which was not taxed in any country. Sounds familiar? This was the much talked about Chevron case in Australia which the courts ruled in favour of the Australian Taxation office and resulted in approximately AU$340 million of disallowed deductions.
In this session, Ms Adriana Calderon, Director at Transfer Pricing Solutions Asia, aims to highlight the TP complexities and risks surrounding the intricate nature of intercompany loans and guarantee fees. The session offers participants the opportunity to go beyond fundamentals and grasp what it takes to structure these financial transactions to comply with the Arm’s Length Principle. Adriana will also dive into some of the nuances often missed, but that companies must take note of.
Be aware of the key considerations in establishing intercompany loans and guarantee fees that will hold fort amid scrutiny by tax authorities:
Join this workshop organised in collaboration with Singapore Institute of Accredited Tax Professionals (SIATP). The session will focus on practical ‘hands-on’ case studies and practical insights on how to do it right.
Register now for this unique workshop. Registration is open until 15 May 2020; special discount applies to members of SiATP, ISCA, SICC SMF and TPS clients.
For further enquiries about the event, please visit
Adriana Calderon has extensive international experience with Big Four and mid-tier firms advising multinational companies in the areas of
corporate and international taxation across South America, the US, Australia and the Asia Pacific Region.
As a TP practitioner, Adriana has advised companies in the Asia Pacific Region across various industries and in a wide range of projects associated with planning, compliance and dispute resolutions with tax authorities. She has also participated in specialised projects involving pricing of financial transactions, business restructures and negotiation of APAs. Most recently, she has participated in TP planning projects to implement BEPS’s Action Plan and country-by-country reporting.
*Asia Tax Awards 2017 by International Tax Review
Singapore is often a preferred location for setting up headquarters as the door to conduct business in Asia. The IRAS has released its views on how Singapore HQ's should plan and implement their transfer pricing framework. Want to know more? Read our article with our views on IRAS TP Guidelines for Singapore HQs.
The Malaysian Finance Bill 2020 incorporates transfer pricing-related changes to the current Income Tax Act, 1967 (“ITA”). The changes permit significantly greater authority to the Malaysia Inland Revenue Board (“MIRB”) and re-emphasises the importance of transfer pricing compliance, with effect from 1 January 2021.
The OECD guidance emphasised that, besides interest rates, all terms and conditions of the financing transactions (including the volume of debt) should be tested against the arm’s length principle.