On 24 April 2020, the Swedish tax agency has updated the financial transaction page. In February 2020, the OECD published a new Chapter X of the guidelines on financial transactions. Financial transactions between companies within a group are common and are often difficult to price. This applies to intra-group loans, cash pooling, financial guarantees and intra-group insurance (captive).
The tax agency prescribed that there was no specific guidance on how to determine arm’s length prices for financial transactions prior to the OECD report. The tax agency considers that the new OECD report only contains clarifications on how to apply the arm’s length principle in relation to financial transactions. The clear implication is that the tax agency may apply the OECD report for transactions entered into even before its publication. The guidance on financial transactions can therefore also be applied backward in time, provided that there is no Swedish case law that indicates something different on a particular issue.
