The transfer pricing aspects of financial transactions came under the spotlight in 2020 as the OECD finally published a consensus document after many years of discussions. Some countries have already started to implement such guidance into their domestic legislations. Interestingly, many court cases dealing with these topics came to a conclusion during this year too.

These developments provide an opportunity to benchmark the OECD guidance against real-world everyday life. In particular, as it relates to:

• The assessment of implicit support when evaluating the credit rating of the borrower.
• Luxembourg’s transfer pricing regime applicable to financing companies and its compatibility with the new OECD Guidance.
• The application to regulated entities in light of the soft safe harbor introduced in the new chapter X.
• New plans of the German Ministry of Finance to tighten intra-group financing rules and the practical impact on MNEs.
• Considerations regarding the cash and liquidity management constraints in the corporate treasury function.