Released on the Cutts Watson website on 15th January 2021
The OECD ‘Transfer Pricing Guidance on Financial Transactions’ Report in February 2020 raises a justification for captives that is unrelated to tax i.e. in managing intra-group risks in a more economically feasible way than that provided by the conventional insurance market. However, from a corporate governance perspective, it may be a well-worth exercise for a captive board to ask itself a set of due diligence questions so as not fall foul of this legislation.
This think piece follows the introduction of DAC 6 rules by the CfR in Malta in January 2021.