Our Firm
Leadership
Debt Private Placements
Debt Transfer Pricing
Executive Summary
Assumptions
Objectives and Scope
Implied Credit Profile
Indicative Pricing Assessment
GCA's Debt Transfer Pricing Team
Disclaimer - Notice to Recipient
The Pitfalls Of Debt Transfer Pricing
Legal
Presentations
Press Coverage
Publications
Links
Contact Us
 
 
 
 
 
DEBT TRANSFER PRICING  

Executive Summary

Continuing growth of multinational enterprises has inevitably led to the increasing need for compliance with Debt Transfer Pricing regulations across a range of taxing jurisdictions. Global Capital Advisors, LLC ("GCA”) is uniquely qualified to offer Debt Transfer Pricing Services that deliver expert evaluation of intercompany debt and associated interest expense deductions.

GCA's Debt Transfer Pricing Services are available to both multinational corporations as well as national revenue authorities. Our transfer pricing services generally pertain to corporations with a subsidiary or subsidiaries possessing material amounts of intercompany debt. Such financings give rise to the need to appropriately document and price transactions so as to reflect arm’s length commercial relationships. This need could be in the context of documenting new intercompany debt or addressing issues associated with legacy financings.

GCA's professionals bring a unique blend of credit rating and capital markets expertise to each engagement, applying these skills to developing both 1) an Implied Credit Profile for the borrowing entity and 2) an Indicative Pricing Assessment of the structure, amount and pricing of the financing in question.

Upon completion of our research and analysis, GCA's clients receive a Debt Transfer Pricing Report. This Report provides an in-depth analysis of, and rationale for, the Implied Credit Profile of the borrowing entity. The Implied Credit Profile usually contains an analysis of comparable companies with equivalent or near-equivalent ratings based on the ratings methodologies of Moody's and S&P. This analysis may or may not include consideration of the possible existence of implicit parental/group support, depending on the applicable timeframe and/or our client’s directions.

An equally comprehensive Indicative Pricing Assessment is also provided. This Assessment is based on market conditions and the capital raising environment for comparable credits as of the relevant timeframe. The Indicative Pricing Assessment considers all relevant variables likely to impact pricing, including amount, maturities, covenants, ranking and call features typical for entities looking to access the public or private markets and possessing comparable Implied Credit Profiles.

Both taxpayers and national revenue authorities involved in debt transfer pricing disputes have availed themselves of GCA’s services as Expert Witnesses and/or consultants. To date, GCA has undertaken transfer pricing and litigation assignments where we have rendered opinions with respect to both the implied credit profiles of intercompany borrowers as well as the pricing of intercompany debt. In our role as Expert Witnesses, we have submitted written reports and have testified at trial for both plaintiffs and defendants. Since our inception, GCA has opined on intercompany debt transactions encompassing in excess of US$ 350 billion.

 
 
Our Firm  |  Leadership  |  Debt Private Placements  |  Debt Transfer Pricing  
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