As we pointed out at the seminar on tax news and developments, in the transfer pricing area, the perception and concept of intra-group financing rules have also shifted, in addition to the response to the current pandemic. Earlier this year, the Czech tax administrator published a translation and the basic information on the new OECD Transfer Pricing Guidelines for financial transactions between related parties, which are intended to be seen as a supplement to and new parts of the basic 2017 OECD Transfer Pricing Directive for Multinational Enterprises and Tax Administrations.

As we summarised at the seminar, we consider the underlying statement of the guidelines to be an interpretation of the arm's length principle in financing to reflect the position of the borrower and the instrument being assessed. The preferred method is clearly the comparable price method for a given borrower and instrument, researched internally or, for example, using specialised databases. We strongly caution against using procedures that, on the other hand, do not work with the position of a given borrower (general macroeconomic data, time series available on the CNB website or valuation procedures used, for example, to estimate the required return on assets, etc.).

In support of the above, one can consider, for example, the recent decision of the German Federal Tax Court on the amount of interest claimed by a German debtor, where the court prefers the method chosen by the taxpayer based on the individual rating of the given debtor. It preferred this method to the tax administrator's view based on the logic of the cost-plus method.