A practical transfer pricing approach for treasury professionals: how to price stand-alone transactions?
A practical transfer pricing approach for treasury professionals: how to price pooled transactions?
June 24, 2020
What a Treasurer needs to know about the new Mandatory Disclosure Regime
September 22, 2020
Webinar – July 9, 11am
The recent OECD transfer pricing guidance for financial transactions provides more clarity on compliance requirements but entails implementation challenges for corporates. Therefore, Zanders will present a practical framework to price all types of intercompany financial transactions. This webinar is the first of a series of two webinars. This first webinar will focus on the pricing of stand-alone financial transactions such as intercompany loans and financial guarantees. The second webinar will provide more details on the pricing of pooled transactions, i.e. cash pool and in-house bank interest rates.
The pricing of stand-alone facilities will be illustrated by focussing on the pricing of intercompany loans. The preferred pricing method is the comparable uncontrolled pricing (CUP) method whereby the arm’s length interest rate is derived from comparable market transactions. In order to make such CUP analysis, a functional analysis of the transaction should be made. This is done in two separate steps. First, a subsidiary-specific credit rating should be made. Zanders will present a practical approach for corporates to implement such a credit rating model. Secondly, the terms and conditions need to be analysed to determine the risks inherent to the transaction.
Lastly, Zanders will present how the functional analysis will serve as input for an automated CUP analysis. The output of the analysis will be the arm’s length interest rate as derived from most comparable market transactions together with statistical insights. The entire analysis needs to be well-documented for audit purposes.
Speakers
Laurens Tidjhof
Partner, Zanders
Professional Background
Laurens Tijdhof joined Zanders in 2002. As Partner, he is responsible for general management and finance. From a business point of view, he is jointly responsible for the global corporate & risk practices.
Laurens is the managing director of Zanders Belgium.
Laurens hold a Master of Science degree in Fiscal Economics, Master of Laws in Tax Law, and Master of Arts in Financial Management.
Key Areas of Expertise
Treasury Strategy & Organization
Treasury Processes & Systems
Bank Rationalization
Corporate Finance
Risk Management
Selected Project Experience
Engagement leader of a treasury transformation project that focused on defining a strategic treasury roadmap for bank rationalization, cash management and technology improvements. During the global project we performed an in-depth review & assessment (incl. benchmarking) that was the basis for a detailed solution design.
Engagement leader for the global commodity risk management project to develop a global strategy, policy, process and tool to measure and manage the exposure of more than 35 raw materials. During the project there was a close cooperation between the Procurement, Finance and Treasury departments.
Engagement leader and project manager of the Financial Risk Management project, which consisted of a Review & Assessment of the management of FX, a Framework Definition and a Treasury & Financial Risk Solution Design for the EMEA region. During this project we worked with Treasury as well as the Procurement department.
Casimir Leuridan
Manager, Zanders
Professional Background
Casimir Leuridan joined Zanders in 2016 as part of the Belgian corporate team
He focusses on the development of a cloud-based platform with smart treasury solution.
He holds a master of science in applied Economics from the Catholic University of Leuven and an advanced master in tax lax from the university of Antwerp with a focus on financial transactions transfer pricing.
He passed the CFA Level I and FRM level I exams.
Key Areas of Expertise
Financial transactions transfer pricing
Intercompany finance
Treasury operations
Selected Project Experience
The Zanders Inside platform currently supports 30+ multinationals. The transfer pricing solutions offered on the platform are designed as self-service tools for treasury professionals to price their intercompany financial transactions in line with the latest regulatory requirements. The team is responsible to create a secure and compliant end-to-end solution overseeing product development, IT security, business development, etc.
Design of treasury transfer pricing policies for multinationals across a wide range of industries and countries
Treasury transformation project at an industrial conglomerate with a focus on accommodating the transition of the treasury back office through a merger. This involved process improvement, treasury system integration and training of the new back office team.
Interim cash manager at a Fortune 500 company with a focus on designing an efficient cash management structure.
