Engagements › Northbridge Marine Holdings › Draft agreement: Interest-free shareholder balance

Draft Agreement From The Policy

Interest-free shareholder balance. Every clause is drafted from the transfer pricing policy and the functional analysis, and says where it came from. Anything the file does not settle is left open, in brackets.

1. Loan agreement

   Between Northbridge Marine Holdings Ltd (the Lender) and Northbridge Bulk Carriers Ltd (the Borrower).

   Source: Transaction record

2. 1. The loan

   The Lender advances €3,200,000, repayable [term to be agreed] after drawdown.

   Source: Balance sheet of Bulk Carriers Ltd, maximum in the year (invented)

3. 2. Interest

   Interest accrues at [rate to be agreed] a year, payable quarterly in arrears.

   Source: Not in the file; group transfer pricing policy §3

4. 3. Payment

   Payment terms [to be agreed].

   Source: Group transfer pricing policy · open point

5. 4. Risks

   [to be agreed: no risk analysis in the file]

   Source: Functional analysis, risks · open point

6. 5. Arm's length

   The parties intend the terms to be at arm's length and will adjust them if a review shows they are not.

   Source: OECD Guidelines 1.6; Income Tax Law s.33(6)

7. 6. Term and law

   Effective from 1 January of the year; [term, termination and governing law to be agreed by the parties].

   Source: Not in the file · open point