Master file, local file and CbCR checker
See which of the three transfer pricing documentation tiers you are inside.
Open itAn intercompany rate is defensible when you can show what it is made of. Start from a reference rate, add the credit, tenor, currency and subordination adjustments, subtract any support benefit, then compare the result with what was actually charged.
The build-up
$
The drawn amount the rate is applied to.
years
Used to show the interest over the whole term.
%
A government or interbank rate for the same currency and a matching maturity, on the date of the loan.
%
From bond or loan data for issuers of the borrower’s standalone rating, not the group’s.
%
Where the loan is longer than the reference instrument, or has no fixed repayment date.
%
Where the loan currency is not the borrower’s functional currency and the reference rate does not already reflect it.
%
Where the loan ranks behind third-party debt.
%
Enter as a positive number; it is subtracted. Only explicit support counts — implicit group support is not a service.
%
What the intercompany agreement says.
Indicative rate
—
In basis points —
Interest a year at the indicative rate—
Over the whole term—
Rate actually charged—
Interest a year at that rate—
Gap, in points—
Interest at risk each year—
Over the whole term—
Price the borrower, not the group
The single most common defect in an intercompany loan file is pricing the borrower as if it carried the group's credit standing. It does not. The starting point is the borrower's own standalone position, adjusted for whatever explicit support actually exists — a written guarantee, a comfort letter with teeth, security over assets. Implicit support from being part of a strong group affects the rating an analyst would give, but it is not something the group charges for.
So the build-up runs: a reference rate for the right currency and the right maturity, plus a credit spread for a standalone borrower of that quality, plus premiums for anything the reference instrument does not capture, minus the value of explicit support. Each component is a number you can point at a source for, which is the whole reason to build it this way rather than quote a single rate.
Which side of the loan is exposed
Over-charging and under-charging fail in different jurisdictions. If the actual rate is above the build-up, the borrower has claimed an interest deduction that is too large, and the borrower's tax authority is the one that adjusts. If it is below, the lender has under-reported interest income, and the lender's authority makes a deemed-interest adjustment instead.
The readout names the exposed side for you. It matters because it decides which country's documentation rules you are writing for, and which country's penalty regime is in play.
Worked example
A five-year loan of 5 million from a parent to an operating subsidiary. A matching-maturity reference rate is 4.0%, the subsidiary standalone would pay a 2.5% spread, and the loan runs slightly longer than the reference instrument.
- The build-up gives 4.0% plus 2.5% plus a 0.3% tenor premium — 6.8%, or 680 basis points.
- The agreement charges 8.0%, which is 120 basis points above the build-up and 60,000 a year on this principal.
- Across a five-year term that is 300,000 of interest deduction the borrower would have to defend.
Add an explicit parent guarantee and enter its benefit. The build-up falls, the gap widens, and the guarantee fee becomes a separate charge in its own right.
What this calculator assumes
- No rate is asserted. Every component of the build-up is yours to enter, from market data on the date the loan was made.
- The borrower is priced standalone with explicit support added back. Implicit group support is not treated as a chargeable service.
- Interest is simple annual interest on the drawn principal. Amortisation, revolving facilities, capitalised interest and fees are not modelled.
- Thin capitalisation and interest limitation rules are separate and can deny a deduction even at a perfectly arm’s length rate.
An estimate, not advice. This is an estimate built from what you typed, not advice on your file. Nothing here reads your documents, checks your treaty article or looks at the year you are actually in. Where the number matters, we agree a fixed fee in writing before any work starts.
Where these figures come from
- current guidance OECD Transfer Pricing Guidance on Financial Transactions
- current memoranda Canada — transfer pricing memoranda, CRA
- current guidance India — transfer pricing, Income Tax Department
Any figure prefilled in the panel above is stated with the year it belongs to and can be changed. Rates and thresholds move; a calculator that asks you for the current one stays right, and one that hides a guess does not.
Cross-border situations we are engaged for
Case study 1
A Shareholder Loan Across a Border at No Interest
An interest-free loan between related companies is priced as if it carried interest, and in some cases a deemed benefit follows as well. The file sets a rate against the borrower's own credit profile and documents the terms that support it.
Read how this one runs
Case study 2
Whether Documentation Was Required At All
The obligation turns on the transactions that actually happened rather than on the size of the group, and the penalty for contemporaneous documentation is charged by reference to the adjustment. The review establishes which side of the line the company sits.
Read how this one runs
Case study 3
A Pricing Study That Started With Who Does What
Functions, assets and risks decide which entity should earn the return, and the method follows from that rather than the other way round. Getting the sequence backwards is how a study fails on its first question.
Read how this one runs
Case study 4
An Assignee Paid at Home and Taxable Away
Where pay stays on the home payroll but the tax arises elsewhere, a shadow run reports the second country's liability without duplicating the payment. Setting it up correctly is what keeps both sides reconcilable.
Read how this one runs
Case study 5
One Employee in a State Nobody Had Registered In
A single person working from home can create payroll registration, withholding and sometimes an income tax filing for the company in that state. The review measures activity against each state's own threshold.
Read how this one runs
Case study 6
Trips That Added Up to a Filing Obligation
Short visits are tracked against a treaty threshold that is measured over a moving window rather than a calendar year. Where the threshold is passed, the obligation reaches back over the whole period.
Read how this one runs
Case study 7
Paying a Beneficiary Who Lives Abroad
Distributions to a non-resident beneficiary carry withholding and a designation that decides its rate. Getting the designation right before the payment avoids recovering the difference through a return afterwards.
Read how this one runs
Case study 8
A Family Trust Abroad With Reporting on Both Sides
A trust settled in one country and a beneficiary living in another produces reporting for the trust, the settlor and the beneficiary, on different forms and different dates. The engagement maps who files what before anything is prepared.
Read how this one runsAll case studies — every published engagement in one place.
Core International & Cross-Border Tax Services
International Tax Planning & Advisory
Strategy and compliance for income, assets and families spread across borders.
One coordinating team: filings on every side of the border are sequenced so treaty relief and foreign tax credits are claimed once — and in the right country.
U.S. & Cross-Border Tax Returns
Dual filers: U.S. citizens in Canada and Canadians with U.S. income run two parallel systems — we prepare both, in the right order, every year.
Expat & Emigration Tax
The move year is its own project: the elections and valuations filed that year decide the next decade of both countries’ returns.
Non-Resident Canadian Tax
Default withholding is 25% of gross: elective returns routinely turn over-withheld rent and pensions into refunds.
Transfer Pricing & BEPS
Documentation prepared with the return is the cheapest insurance in international tax; reconstructing it during an audit is the most expensive.
Tax Treaties & Withholding
Relief is only as good as the paperwork claiming it — we build treaty positions that survive review on both sides.
Cross-Border Estates & Trusts
Wills drafted for one country routinely misfire in the other — deemed disposition here, estate tax there, credits in between.
Global Investments & Reporting
Information returns carry the sharpest penalties — $25 a day whether or not any tax is owing. We keep them clean and on time.
Cross-Border Corporate Tax
Expansion raises the same four questions every time — entity, PE, repatriation, payroll. We answer them before the tax authorities do.
India Tax for NRIs & Returning Residents
The deduction is taken on the sale price, not the gain — which is why an NRI property sale strands cash unless the certificate is applied for before closing.
Canadian Tax with a Foreign Element
Residency is decided on facts, not on a form — and the year you arrive or leave is the one where the largest amounts turn on the smallest details.
UAE Tax for Expats & Their Home Country
A zero-tax country is only half the answer — the question that decides the bill is whether the country you came from still treats you as resident.
Industries & Client Types We Serve Worldwide
Global E-commerce & Marketplaces
Technology & SaaS
Professional Services Firms
Cross-Border Real Estate
Importers, Exporters & Manufacturers
Athletes, Artists & Entertainers
Remote Workers & Digital Nomads
Investment Funds & Holding Companies
Global E-commerce & Marketplaces
- Foreign VAT / GST / sales tax registrations
- Marketplace withholding reviews
- Inventory nexus & PE analysis
- Multi-currency books reconciled
Who We Serve:
Technology & SaaS
- Cross-border revenue sourcing & withholding
- IP structuring with real substance
- Equity for cross-border teams
- U.S. expansion: entity & PE setup
Who We Serve:
Professional Services Firms
- Reg 105 / 102 waivers
- Permanent establishment risk
- Partner mobility planning
- Cross-border withholding recovery
Who We Serve:
Cross-Border Real Estate
- Section 216 rental returns
- FIRPTA withholding recovery
- Section 116 clearance
- Treaty credit optimization
Who We Serve:
Importers, Exporters & Manufacturers
- Transfer pricing documentation (s.247)
- Customs value vs transfer price
- Foreign affiliate reporting (T1134)
- Country-by-country reporting
Who We Serve:
Athletes, Artists & Entertainers
Performance income is taxed where earned — Regulation 105 in Canada, withholding agreements in the U.S. — with special treaty articles overriding the usual rules.
Performance income is taxed where the performance happens, and the deduction is usually taken at source on the gross fee before expenses. Recovering the difference is a filing exercise in the other country, and it only works if the tour, the residency and the withholding certificates were documented while the work was being done.
- Reg 105 & U.S. CWA agreements
- Multi-state & country calendars
- Touring income allocation
- Royalty & image-rights withholding
Who We Serve:
Remote Workers & Digital Nomads
- Residency analysis before moving
- Employer payroll exposure
- Totalization & social security
- Foreign tax credits
Who We Serve:
Investment Funds & Holding Companies
- Treaty access & PPT reviews
- FAPI & surplus computations
- Withholding-efficient routing
- Governance & substance
Who We Serve:
