This master thesis examines the transfer pricing principles that has arisen in connection with the relative new financial and cash management product for groups, cash pools. The thesis has a focus on Danish tax administrations rules and principles, but also examines the newest recommendations from OECD’s BEPS rapport Actions 8-10, but with a focus on how this will likely impact and be used by the Danish authorities. Furthermore it illuminates some of the main issues that has arisen in connection with the negative deposit rates, both in the sense of how these are interpreted legally, the deduction of these from companies taxes and impact they may have on the rules regarding reductions/limitations of the tax deduction in Denmark.
The cash pools are used to control and pool together the liquidity/cash to manage their short term loans/need of such instead of boring from a third party and as such makes rather financial sense, but the lack of directly uncontrolled comparable products as they are only used within a group does complicate some of the issues in transfer pricing.
The thesis argues for the importance of groups and companies to properly document their choices and methods as transparency seems to be an important factor, furthermore in legal courts the lack of such has proven to have significant impacts on how the law and rules are interpreted by the Danish authorities.
The result is an examination of the most relevant factors, methods and practices that are in important in determining transfer pricing principles on financial transactions, especially on Cash pools.