Factors of Credit Ratings for Transfer Pricing of Loans in European Conditions

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216305%3A26510%2F24%3APU155052" target="_blank" >RIV/00216305:26510/24:PU155052 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.18267/j.polek.1421" target="_blank" >https://doi.org/10.18267/j.polek.1421</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18267/j.polek.1421" target="_blank" >10.18267/j.polek.1421</a>

Result language

angličtina

Original language name

Factors of Credit Ratings for Transfer Pricing of Loans in European Conditions

Original language description

In accord with international transfer pricing regulations, the borrower's creditworthiness is the main factor to be reflected in valuation of cross-border loan transactions between associated enterprises. However, trouble invariably arises for small and medium-sized enterprises that do not have an assigned credit rating. The aim of this paper is to determine the most reliable predictors of a company's credit rating for European entities facing missing rating coverage for the purpose of transfer pricing. Based on 2015-2019 data sourced from the Orbis database, the study examines key financial ratios and non-financial information that could be instrumental in reconstructing a long-term rating category of a company assigned by Moody's Investors Service. The results identify interest coverage as the most useful predictor. Therefore, a law-approved and taxcredit rating) should preferably exploit interest coverage as a link to the otherwise missing ratings.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50200 - Economics and Business

Project

<a href="/en/project/TL05000328" target="_blank" >TL05000328: Setting the market price for the financnial transactions while using the arm´s length principle</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2024

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

POLITICKA EKONOMIE

ISSN

2336-8225

e-ISSN

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Volume of the periodical

72

Issue of the periodical within the volume

5

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

25

Pages from-to

727-751

UT code for WoS article

001332091300001

EID of the result in the Scopus database

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