Transfer Pricing

Week 1: OECD framework, ALP, delineation and recognition of financial transactions 

Theme: the foundation of transfer pricing for financial transactions. 

Content: (i) ALP (Article 9 OECD Model), OECD BEPS Actions and 2020 Guidance on Financial Transactions (Ch X); (ii) risk delineation: control over risk, financial capacity, assumption vs mitigation; (iii) functional analysis of financial transactions: lender vs borrower; (iv) introduction to transfer pricing methods for financial instrument; and (v) accurate delineation and recognition of financial transactions. 

[Optional activity of up to 45min] - Workshop: map functional and risk profiles to different financial transaction types (loans, deposits, guarantees, cash pooling).  

Week 2: Credit rating analysis and debt pricing 

Theme: credit rating approaches and assessing debt capacity. 

Content: (i) standalone and adjusted credit ratings; (ii) overview of rating agency methodologies (S&P, Moody’s, Fitch); (iii) internal models and scoring tools for group entities; (iv) role of implicit and explicit group support, notching guidance, and group credit quality; and (v) e.g. Bloomberg’s DRSK tool and practical use cases. 

Practical lab: build a synthetic credit rating and use it to determine arm’s length interest rates under different debt tenors and scenarios. 

Week 3: Group treasury: functional analysis and business models

Theme: centralised treasury and its TP implications. 

Content: (i) treasury structures: in-house bank, service provider, entrepreneur; (ii) functional roles: liquidity management, funding, FX hedging, cash pooling; (iii) agent vs principal role of treasury centres; (iv) intercompany treasury transactions: deposit placement, internal loans, back-to-back arrangements; and (v) intragroup service charges vs financial transactions. 

Case study: functional and remuneration analysis of a regional treasury hub. 

Week 4: Intercompany loans: pricing fundamentals 

Theme: key aspects of interest rate pricing and intercompany loan terms. 

Content: (i) overview of loan terms: maturity, security, currency, subordination; (ii) Credit risk and the borrower’s financial capacity; (iii) use of the CUP method and comparability issues in financial markets: internal and external comparables; (iv) base rates, credit spreads, and market data sources (e.g. Bloomberg, Refinitiv LoanConnector, Thompson Reuters Eikon, S&Ps Capital IQ); and (v) documentation and evidence of pricing rationale. 

Exercise: price an intercompany loan using live market data and justify assumptions. 

Week 5: Cash pooling: design and transfer pricing 

Theme: transfer pricing of intra-group liquidity structures. 

Contents: (i) types of cash pools: zero balance vs notional; (ii) allocation of cash pool benefits and risks; (iii) role and remuneration of the pool leader; (iv) treatment of balances (loans vs deposits), interest spreads; and (v) documentation and typical issues raised in disputes. 

Group exercise: design and price a cash pooling structure including deposit rates, overdraft interest, and cash pool leader remuneration. 

Week 6: Guarantees and financial support instruments 

Theme: pricing and delineation of intra-group guarantees. 

Content: (i) explicit vs implicit guarantees, (ii) OECD-approved pricing methods: CUP, cost savings, yield approach, (iii) delineation of guarantees vs passive association, and (iv) case law and local practices. 

Workshop: price a financial guarantee using two methods and analyse impact on borrower’s rating. 

Week 7: Planning, documentation, and risk management 

Theme: strategic implementation, audit defence, and controversy management. 

Content: (i) building robust TP policies for financial transactions; (ii) controversial areas: loan pricing, guarantees, treasury remuneration; (iii) documentation strategies and local file examples; (iv) interplay with domestic interest deduction rules (e.g., ATAD, BEAT); and (v) APA/MAP planning for treasury arrangements. 

Simulation: teams present and defend a full group financing structure including loans, treasury functions or guarantees to a mock tax authority panel. 

This course is mainly taught by Mr Gaspar Lopes Dias, though there will be a number of guest speakers.

Gaspar Lopes Dias is a transfer pricing expert and partner at STI Taxand Cyprus with broad experience across financial operations, business reorganisations and IP structuring, advising multinationals and investment funds in diverse industries. Before joining Taxand Cyprus in 2021, he worked with Baker McKenzie in London, Loyens & Loeff in Luxembourg, and KPMG in Belgium. He holds degrees from Nova University Lisbon, Tilburg University, and the University of Oxford, and is a member of ADIT and IFA.

Philip Baker KC is a practicing barrister and King’s Counsel, practicing from chambers in Field Court, Gray’s Inn.  Additionally, he is Visiting Professor at the Law Faculty of Oxford University and a Senior Visiting Fellow at the Institute of Advanced Legal Studies, University of London.

He specialises in international aspects of taxation, which covers both corporate and private client matters. He has advised and represented several governments on tax matters, and appeared as an expert in cases around the world.  He has a particular interest in taxation and the European Convention on Human Rights, is author of a book on Double Taxation Conventions, and editor of the International Tax Law Reports.  He was one of the General Reporters on the Practical Protection of Taxpayers’ Rights for the International Fiscal Association Congress in Basel in 2015, and is one of the directors of the Observatory on Protection of Taxpayers’ Rights.

Guglielmo Maisto founded Maisto e Associati in 1991. He is a Professor of International and Comparative Tax Law at the Università Cattolica di Piacenza. He is Honorary President of the International Fiscal Association (IFA), member of the Practice Council of New York University (NYU) Law’s International Tax Program and member of the Board of the American Chamber of Commerce in Italy. In 2023 he was appointed by the Ministry of Economy and Finance as member of the Technical Committee established for the implementation of the Italian Tax Reform. He is one of the independent persons of standing eligible as a member of the Advisory Commission provided for in the EU Directive on Tax Dispute Resolution Mechanisms in the European Union. He was President of the International Fiscal Association (IFA) and member of the Board of Trustees of the International Bureau of Fiscal Documentation (IBFD) in Amsterdam. He acted as a consultant to the Ministry for European Community Affairs and was a member of the EU Joint Transfer Pricing Forum. He is a member of several law societies and of the editorial board of various Italian and foreign tax legal journals. He usually participates as speaker to several annual tax conferences.

Aurelio Massimiano was admitted to the Association of Chartered Accountants in 2002. He obtained an LL.M. Degree in International Tax Law at the University of Leiden, The Netherlands. He joined Maisto e Associati in 2005 after having worked with the International Tax Office of the Italian Revenue Agency. He has become partner since 2014. He often speaks at tax conferences and lectures on international tax matters for specialization courses at university level and for various other organizations. He is a member of the board of the Italian Branch of the International Fiscal Association (IFA). His areas of expertise are international taxation and transfer pricing.

Christos Theophilou is an international tax and transfer pricing partner at STI Taxand. Christos is a tax attorney with a strong accounting and international tax background who advises clients on complex international tax and transfer pricing matters, such as cross-border investments, private equity structuring, structured finance, IP structuring and international trade. Christos holds an MSc in Tax Law from Oxford University, a Bachelor's degree in Economics, and an LLB Law degree. He is a Chartered Accountant in England & Wales and has obtained the Advanced Diploma in International Taxation (ADIT) from the UK Chartered Institute of Taxation. Christos is a prolific contributor to various esteemed international tax publications, including IBFD, Tax Notes International, Bloomberg Tax, International Tax Review, Edward Elgar, and IFA. He is co-author of the book, "Pillar Two of the Inclusive Framework on BEPS – A Problem-solving Approach", contributing Chapter 2 Individual GloBE income or loss (Publication Date: September 2024). He is currently a member of the Τax Policy and Strategy committee of ICPAC.  Christos Theophilou also serves as a freelance lecturer for Tolley's (LexisNexis), the IBFD and QMUL, where he lectures on ADIT Paper 1 Principles of International Tax, Transfer Pricing, and Pillar 2. He is a frequent speaker at international tax conferences, sharing his extensive knowledge and insights with the global tax community.