Guarantee fee pricing — is this a do-it-yourself job?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the fee is priced on the interest saved relative to a standalone borrowing, split to reflect the guarantor's risk.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Why does an intercompany loan guarantee need its own transfer pricing analysis?
When a parent guarantees a subsidiary's borrowing, the guarantee itself is treated as a service with value, because it typically lets the subsidiary borrow at better terms than it could obtain alone. Tax authorities expect an arm's length fee for that benefit, separate from the interest rate on the loan itself. We isolate the benefit the guarantee provides and price it as its own transaction rather than folding it into the loan terms.
How is an arm's length guarantee fee typically determined?
Common approaches compare the borrowing entity's credit standing with and without the guarantee, look at the cost the guarantor would charge a third party for equivalent support, or reference pricing on comparable guaranteed instruments in the market. We select the method that best fits the available data and the specific credit profile of the borrowing entity, rather than applying a standard rate across every intercompany guarantee.
What documentation supports an intercompany guarantee fee?
A credit assessment of the borrower with and without the guarantee, the reasoning behind the method chosen, and the terms of the guarantee itself all need to be on file, since a guarantee fee with no supporting analysis is an easy target on review. We prepare that documentation alongside the pricing so the fee can be defended on its own merits.
What does a transfer pricing benchmarking study do?
It evidences that your related-party pricing sits within the range independent parties achieve. The work is comparison: identify companies or transactions genuinely similar in function, risk and assets, compute their margins, and show where your result falls against that range. Done before the filing deadline it supports the position; produced afterwards under audit it carries far less weight. See benchmarking study.
What is country-by-country reporting?
A report that the largest multinational groups file with their home authority, setting out revenue, profit, tax paid and accrued, capital, employees and tangible assets for every jurisdiction they operate in. It is exchanged between authorities and used for risk assessment, not to compute tax. Its effect on the ground is that inconsistency between the report, the local files and the statutory accounts is itself what draws attention. See our transfer pricing work.
