Transfer Pricing Solutions for Intercompany Guarantees At A Glance

Capabilities and Services

In the wake of the ongoing financial and economic crisis, the pricing of intercompany guarantees is likely to become one of the most contentious issues in transfer pricing. Tax authorities for their part will be concerned that guarantee fees adequately reflect the heightened risk of business failure and default. Taxpayers, meanwhile, will face the arduous challenge of determining what constitutes an arm's length guarantee fee at a time when rules of thumb and quick answers based on historical data have become less reliable.

NERA's approach to helping clients overcome this challenge is founded upon the combined expertise and knowledge of specialists in our Transfer Pricing and Securities and Finance Practices. Through formal analysis of the underlying financial economics and application of sophisticated and rigorous pricing techniques, NERA's economists are able to develop robust solutions in a wide range of circumstances.