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By Sophie BOULANGER, Partner, Head of Transfer Pricing, Transfer Pricing Services Xanthippi KLADOU, Manager, Transfer Pricing Services, KPMG Luxembourg
In the evolving landscape of transfer pricing, it appears increasingly important to analyze the debt capacity of a related party borrower by assessing whether a comparable independent entity could have secured similar debt and reasonably serviced it, taking into account factors such as market conditions, capital structure, and projected cash flows.
As the distinctions among guidance, market trends, and administrative tolerance continue to shift, the responsibility of ensuring compliance - reflecting both the lending and the borrowing perspectives and how this applies in practice - may be...
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