Interco Financing and Swaps

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Adriaan“Yeah, yes. So documentation is, is indeed crucial, I think. My advice would always be to, to deal upfront with the— with setting it arm's length interest rate. That makes life quite easier than doing something afterwards. Um, then again, there are options for both, right? So it's always better to have a benchmark study in place than having nothing in place. And— but I think 3 topics are key here. So, so that's, um, yeah, having your TP report ready, your transfer pricing reports, So if any questions come in that you basically have documented the choice you have made and analysis you have done, you should also monitor basically your positions, had that what's actually agreed in— uh, or share— then I'll basically also go into the third one. You should have an intercompany agreement and you should have monitoring in place that what is actually agreed in the intercompany agreement, uh, that is also being dealt with on a day-to-day basis. So Sometimes there's a mismatch, um, and yeah, that's something tax authorities may also use when, yeah, assessing your, uh, your interest rates, but also the transaction as a whole. So it's not a question only of whether the 5% is at arm's length or the 7%, but it could be that the full, uh, deducted interest could be denied, basically. So that's also something to consider. So it's really important to have proper documentation in place.”