Transfer pricing transactions are now one of the most scrutinized areas for multinational enterprises. With evolving OECD guidance, BEPS initiatives and an increasing focus on economic substance, tax authorities are examining more closely than ever how related-party financing is structured and priced. Beyond simply demonstrating that a loan exists, tax authorities now expect clear and compelling evidence that every transaction is fully supported by a commercial rationale and complies with the arm’s-length principle.

Beyond ‘quote-based’ transfer pricing

For our global energy logistics client, these changes in regulatory developments triggered a need to adapt to the new industry standards and transfer pricing guidelines. For years, the company had relied on bank-provided quotes to set intercompany loan terms, which was market practice in the past, but which required adjustments given the updates and requirements of the OECD guidance.

“In the past, like a lot of other companies, we used to reach out to the market to our banking partners to request quotes for pricing intercompany loans – and these became our benchmarks,” recalls a company treasurer. “It was market practice back then.”

But with tax authorities now probing the rationale behind transfer pricing, it highlighted the need for a  methodology that clearly articulates how and why each loan was priced. This is where Zanders stepped in with the Transfer Pricing Suite – their automated solution for pricing and documenting intercompany financial transactions.

Entity-level loan pricing

The company’s previous process was that indicative quotes from relationship banks were used as basis to price intercompany loans.  The development in OECD guidelines and requirements, combined with the company’s desire to become less dependent on third parties in the pricing of IC-loans, triggered a project to look at alternative solutions in which a balanced assessment based on qualitative- as well as quantitative aspects were taken into account.

Zanders’ Transfer Pricing Suite meets this requirement, by combining market data, credit analytics and standardized methodologies to assess each borrower’s standalone credit quality. The model adjusts for implicit support, sector dynamics and relevant country risk, ensuring loan pricing reflects the borrowing entity’s true risk profile.

However, while the model delivers transparent, defensible calculations, expert judgment still has a role to play – especially when fine-tuning benchmarks to reflect real-world conditions. "When pricing, I will sometimes question whether the benchmark fully reflects reality," a company treasurer explains.

When I reach out to our account manager at Zanders, he immediately helps, building custom benchmarks rather than simply relying on the software output. This personal contact is exactly what’s needed.

Company Treasurer

Audit-ready reporting

In addition to pricing intercompany loans, Zanders’ Transfer Pricing Suite produces comprehensive, audit-ready documentation and reports for the client. Every step of the methodology – from credit scoring and benchmarking to final margin selection – is clearly detailed. This ensures that each financing arrangement is supported by verifiable evidence aligned with OECD guidance and global transfer pricing standards.

“One of the main benefits was the documenting,” a company treasurer explains. “When you run a report, you get a PDF of 20–30 pages, which provides a really good balance between qualitative and quantitative aspects. Before when we asked for quotes from banks, you’d just get a rate based on general calculations on the banking site, but no insight into how the bank considered qualitative factors or implicit credit support. Those are elements that the software explicitly includes, a unique benefit.”

Accuracy, compliance and efficiency

The migration to Zanders’ Transfer Pricing Suite has given the treasury team complete confidence when presenting their intercompany loan arrangements to authorities worldwide, thanks to the following powerful performance advantages:

• Stronger audit defensibility and regulatory compliance

During audits, the treasury team can now present documentation that aligns directly with OECD guidance and financial transaction standards. Each loan is supported by a transparent chain of evidence, removing ambiguity and eliminating reliance on subjective judgement.

• More accurate, performance-based pricing

By shifting away from bank quotes and geography-driven assumptions, loan margins now reflect the true financial reality of each subsidiary. Strong-performing entities benefit from appropriately lower spreads, while higher-risk borrowers receive pricing that aligns with their credit profile. This approach brings a level of fairness and internal consistency that was impossible under the previous, quote-based model.

• Streamlined operations and reduced manual effort

Loan pricing processes that previously required numerous emails, spreadsheets and time-consuming coordination across time zones, can now be run effortlessly through their Zanders-powered platform. With automated documentation generated at the same time. This frees the company’s treasury team to focus on higher-value strategic initiatives.

• Impact across intra-group financing

Beyond transfer pricing, the company now uses the tool for cash pooling and intercompany guarantees – areas not included in the original project. This provides clarity, confidence, and control across all aspects of intercompany financing.

Transforming your transfer pricing?

Whether your organization is facing heightened regulatory scrutiny, managing complex intercompany financing or seeking to replace legacy processes with a modern, data-driven framework – Zanders provides solutions delivered with expertise and pragmatism.

Get in touch to discover how Zanders can transform your intercompany financing strategy and ensure defensible, transparent, and performance-aligned pricing across your global operations with the Transfer Pricing Suite.

Banks perform data analytics, statistical modeling, and automate financial processes using model software, making model software essential for financial risk management. 

Why banks are recently moving their model software to open-source¹: 

• Volume dependent costs: Open-source comes with flexible storage space and computation power and corresponding costs and capacity.  
• Popularity: Graduates are often trained in open-source software, whereas the pool of skilled professionals in some specific software is decreasing. 
• Customization: You can tailor it exactly to your own needs. Nothing more, nothing less. 
• Collaboration: Required level of version control and collaboration with other software available within the bank. 
• Performance: Customization and flexibility allow for enhanced performance. 

Often there is a need to reconsider the model software solution the Bank is using; open-source solutions are cost effective and can be set up in such a way that both internal and external (e.g. regulatory) requirements are satisfied. 

How Zanders can support in moving to open-source model software. 

Proper implementation of open-source model software is compliant with regulation.   

• Replication of historical situations is possible via version control, containerization and release notes within the open-source model software. Allowing third parties to replicate historical model outcomes and model development steps.   
• Governance setup via open-source ensures that everything is auditable and is released in a governed way; this can be done through releases pipelines and by setting roles and responsibilities for software users.  
• This ensures that the model goes from development to production only after governed review and approval by the correct stakeholders.  

Migration to open-source software is achievable. 

• The open-source model software is first implemented including governance (release processes and roles and responsibilities).  
• Then all current (data and) models are refactored from the current model software to the new one.  
• Only after an extensive period of successful (shadow) testing the migration to the new model software is completed.  

Zanders has a wealth of experience performing these exercises at several major banks, often in parallel to (or combined with) model change projects. Hence, if you have interest, we will be happy to share some further insights into our latest experiences/solutions in this specific area.  

Therefore, we welcome you to reach out to Ward Broeders (Senior Manager).

In an effort to continuously improve and automate its internal processes, the American multinational cosmetics company wanted to leverage technology and further enhance the Transfer Pricing compliance of financial transactions. As a result, it engaged Zanders to use its cloud-based Transfer Pricing Suite.

Estee Lauder has been Zanders’ client for quite some years. “We have been working with Zanders before in some projects and that always worked very well. In this instance too”, says Bart Taeymans, Vice President Global Treasury Operations. “They helped to draft and execute the bank selection RfP and restructure our European banking structure, and supported with the implementation of SAP Inhouse Cash and Bank Communication Management. And recently, they supported us with their Zanders Inside Transfer Pricing Suite.”

In view of the changed regulatory environment, we wanted to increase control of the entire process. Zanders Transfer Pricing Suite looked as a sustainable tool to automatize the process, while maintaining a robust technical methodology compliant with the OECD TP Guidelines.

Bart Taeymans, Vice President Global Treasury Operations

Challenge

New OECD Transfer Pricing guidelines

With the release of Chapter X by the OECD, the company wanted to implement a new process in order to comply with its Transfer Pricing obligations in-house, without depending on external parties, Taeymans explains. “In view of the changed regulatory environment, we wanted to increase control of the entire process. Zanders Transfer Pricing Suite looked as a sustainable tool to automatize the process, while maintaining a robust technical methodology compliant with the OECD TP Guidelines’’.

Solution

Sophisticated tool

Treasury Director Marc Vandewaeter: “Zanders’ Transfer Pricing Suite is very sophisticated. In addition, during the onboarding process, Zanders added some additional currencies to the tool that were not there yet for us to cover additional regions. Another important thing for us is that we are able to instantly generate the Transfer Pricing reports – including the supporting documents providing details on the economic analyses.”

Due to the tool’s flexibility, Estee Lauder had a managed transition phase. “It’s challenging to change processes, but the tool supported the transition phase in a controlled manner.”

Having all the information in one tool helps us understanding the approach followed and financial information considered for each case. This is important for us as we need to make sure that we fully understand the details.

Marc Vandewaeter, Treasury Director

Performance

Timely implementation

Taeymans: “I think it’s been a great integrated implementation. The team was very supportive, providing clarifications where needed and support when required – all to ensure timely implementation of the new procedure, focused on the start of our new fiscal year.”

Vandewaeter: “The challenge of importing the financial data was that it needed to be implemented in the Zanders Inside tool format, which is required to determine a rating. Luckily all financial data from all our affiliates is already standardized. That makes it easier to reproduce and implement this data. That saves quite a lot of time.”

“The benefit we have is that we are on one SAP instance globally”, adds Taeymans. “That helps us to great extent in retrieving the financial information in a structured manner. So once we had the templates to convert to the information required by Zanders, everything went very well.”

The entire process in one user-friendly platform

Vandewaeter has been intimately involved in working with the tool. “We wanted to make sure that Zanders’ tool would provide a consistent approach for all transactions, in line with what we had done before, and that potential differences in the results could be explained. Having all the information in one tool helps us understanding the approach followed and financial information considered for each case. This is important for us as we need to make sure that we fully understand the details.”

Taeymans: “To have that entire process – from the financial information, credit rating analyses, benchmark rates, to the final reports – featured in one tool is obviously what we’ve been looking for. It’s very important to have it all in one system generating a full report on an entity basis. Of course, you need to know what to enter and what to select. But as a web-based tool it is very user-friendly, easy to navigate and well designed. It is quite easy to extract the pricing for a certain loan. And from an operational point of view, it is also useful to do a simulation and it doesn’t take much time to do that. You need to upload all the financial statements, but it is more dynamic and the pricing update is based on current data. In addition, the support received from Zanders team is very good.”

Learn more about our Transfer Pricing Solutions