Bond search versus loan search? The question of which benchmarking method to use has for a long time been a matter of technical debate among many transfer pricing experts and tax administrations.

A clear answer has now been given by the French Conseil d'Etat in its long-awaited opinion dated 10 July 2019.

Despite the differences between the types of instruments, bonds can be used as comparable when performing an interest rate benchmarking in intragroup loans.

This is one of the hot topics in the transfer pricing world in France but it has wider application because it interprets OECD guidelines on financial transactions applied around the globe.