NERA Head of Global Transfer Pricing Dr. Emmanuel Llinares and Consultant Bernardo Danesi wrote two chapters in Applying the Arm’s Length Principle to Intra Group Financial Transactions: A Reference Guide. Their chapter “Assessing Factoring Transactions Within the Arm’s Length Principle” explains the complexity of characterizing and benchmarking factoring transactions and provides an account of the considerations a transfer pricing practitioner should make in relation to factoring transactions. 

Their second chapter, “Pricing Factoring Transactions: A Case Study,” uses a factoring arrangement example to engage with typical considerations that should be made when pricing an arrangement in conformity with the arm’s length principle. They present evidence for having an accurate value chain and analyses prior to selecting and applying a transfer pricing method.

Order Applying the Arm’s Length Principle to Intra Group Financial Transactions: A Reference Guide from Wolters Kluwer here.