India - The Unsettled Issue of Intercompany Guarantees
- S.K. Bilaney
- Derivatives & Financial Instruments, 2016 (Volume 18), No 6
- 27 January 2017
Based on an analysis of existing Indian transfer pricing provisions, judicial precedents in India, the OECD Transfer Pricing Guidelines (OECD Guidelines) and the Actions 8-10 Final Report, the author considers types of intercompany guarantees and whether they are a chargeable service, the approach of tax authorities to determining the arm’s length rate of guarantee fees or commissions, and an ideal benchmarking approach for guarantee fees or commissions.