A group company (large for T.P. purposes) has provided funds to other group members or paid liabilities on their behalf.
The amounts are declared in the accounts of the companies as inter company balances and have accumulated over a number of years. There are no interest payments, repayment terms or arrangements in place.
Transfer Pricing appears to includes financial arrangements but excludes loan relationship debits and credits. As I understand it, if the balances are written off the transactions will be tax neutral i.e. no relief and no allowances.
My question is should the group be applying interest for Transfer Pricing purposes or can the balances be deemed to be excluded as loan relationship debits and credits?
Your thoughts would be appreciated.
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