Debt and treasury management software
Intercompany loan audit checklist: what tax, the board and your system each need to show
An intercompany loan stands up to audit when three layers line up: the tax file shows arm's length terms, the board has approved the funding, and the system shows what was calculated and changed.
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How to use this checklist
Use it before a tax audit, before the year-end close and whenever a new intercompany loan is approved. Answer each question with yes, partly or no. A "partly" or "no" is the gap to close before an auditor or the board finds it.
Each layer has its own owner: your tax adviser owns the tax layer, the board and legal own the approval layer, and finance owns the system layer. The checklist covers what a finance team can document. It is not tax or legal advice, and requirements differ by country, so confirm the details with your advisers.
Layer 1: Tax audit
Owner: your tax adviser. Germany serves as the reference example: the points follow § 1 of the German Foreign Tax Act (AStG), which applies to cross-border loans between related parties. Other countries apply their own rules, so your tax adviser decides what applies. See the sources below.
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Is there a written loan agreement, signed before the funds moved?
It names lender, borrower, amount, currency, term, repayment and interest terms.
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Is the interest rate supported by an arm's length analysis dated at the time the loan was agreed?
§ 1 (3) AStG looks at the conditions when the transaction was agreed, so the analysis carries that date and sits in the tax file.
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Is the rate built from observable components and placed within a range?
Practitioners commonly combine a reference curve for the currency and term with a credit spread for the borrower's rating, adjusted for ranking, security and fees. If the rate falls outside the resulting range, § 1 (3a) AStG applies the median unless another value is shown to fit better.
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Could the borrower have serviced the loan for its whole term from the start, and does it need and use the funds?
For cross-border group financing, § 1 (3d) AStG asks the taxpayer to show both. Record the reasoning when the loan is granted.
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Is the rate at or below what the borrower could pay third parties on the group's rating?
For cross-border loans within multinational groups, § 1 (3d) AStG treats the interest above that level as not arm's length, unless a different derived rating is shown to be arm's length.
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Were interest and repayments paid as the agreement says?
§ 1 (3) AStG looks at the actual circumstances of the transaction, so payment dates and amounts should match the agreed schedule.
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Is every amendment, extension or waiver in writing?
Each one is dated before it takes effect.
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Have withholding tax and interest deductibility been reviewed for each country?
Your tax adviser confirms the treatment per country.
Layer 2: Board resolution
Owner: the board and legal. This layer shows that the group decided on the funding and can find that decision again.
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Does each loan have a resolution or documented approval?
It states date, lender, borrower, amount, currency and term.
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Is the approval dated at or before drawdown?
Funds move only after the decision is recorded.
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Do the approved rate and repayment terms match the loan agreement?
The approval and the signed agreement carry the same terms.
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Do later changes to terms carry their own approval?
Each amendment has its own date and reference.
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Can the approval be traced from the loan record?
The loan record carries the approval reference, so approval and loan point to each other.
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Does the board or CFO receive intercompany positions at agreed intervals?
Outstanding principal, interest and accruals, by entity and country.
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Are upcoming rate resets reviewed before they fall due?
Rate resets are on the agenda before the date, not after.
Layer 3: System
Owner: finance. The system layer shows what was calculated, on which terms and what changed. This is where TreasuryView carries the load.
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Is every intercompany loan held once, with its full terms?
TreasuryView holds entities, currency, rate type, day count and repayment schedule per loan.
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Are agreement date and approval reference stored on the loan?
Both can be held in user defined fields, so the system record points to the signed documents.
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Are interest, accruals and balances calculated for any reporting date?
TreasuryView calculates them per loan and reporting date, so nothing is rebuilt each month.
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Are rate reset dates for floating rate loans visible in advance?
TreasuryView lists upcoming rate reset dates.
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Do amended loan terms show in a change history?
TreasuryView shows the change history of amended terms, and new terms apply from the change date.
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Can positions be reported by entity and country?
TreasuryView reports outstanding principal, interest and accruals by entity and country.
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Do results reach accounting without retyping?
TreasuryView exports to Excel or CSV and sends results through the REST API. It creates no postings or eliminations.
What TreasuryView covers and what stays with others
TreasuryView covers the system layer and supports the other two with data. It does not replace tax advice, board decisions or the signed documents.
| Layer | Question the reviewer asks | Evidence lives in | Role of TreasuryView |
|---|---|---|---|
| Tax audit | Were the terms agreed in writing and priced at arm's length? | Tax file and signed agreements | Holds the agreed terms, agreement date and amendments per loan. Provides no tax advice and no arm's length analysis. |
| Board resolution | Who approved this loan and on what terms? | Minutes and resolutions | Stores the approval reference on the loan and reports positions by entity and country. Does not draft resolutions. |
| System | What is owed, what has accrued and what changed? | TreasuryView | Calculates interest, accruals and balances for any reporting date, shows upcoming rate resets and the change history of amended terms, and exports the results to accounting. |
More on intercompany loan management, automated reporting and TreasuryView compared with spreadsheets.
FAQ: intercompany loan audit checklist
What do tax auditors check in intercompany loans?
Tax auditors typically check whether an intercompany loan was agreed in writing, priced at arm's length and performed as agreed. In Germany the basis is § 1 AStG. They look for a signed agreement dated before the funds moved, a documented basis for the interest rate, and evidence that interest and repayments were paid. Requirements differ by country, so confirm the details with your tax adviser.
What documents should be on file for an intercompany loan?
Each intercompany loan should have a signed agreement, a board or management approval, the basis for the interest rate, written amendments and proof of payments. TreasuryView holds the agreement date, approval reference, terms and calculations per loan. The signed documents stay in your legal or tax file.
Does an intercompany loan need a board resolution?
Whether a resolution is required depends on the company's articles, local law and group policy, so ask legal. A documented approval shows who decided, when and on which terms. TreasuryView stores the approval reference on the loan so it can be found again.
How can I show an auditor that loan terms changed?
TreasuryView keeps a visible change history of amended loan terms, and new terms apply from the change date. Keep the signed amendment with the agreement in your file and store its reference on the loan, so the document and the system record point to each other.
Can TreasuryView book intercompany interest into the ledger?
No. TreasuryView calculates interest, accruals and balances for each loan and reporting date, and sends the results to your accounting software as an Excel or CSV export or through the REST API. It creates no postings or eliminations.
How is an arm's length interest rate for an intercompany loan determined?
An arm's length interest rate is commonly built from a reference curve for the loan's currency and term, a credit spread based on the borrower's rating (a synthetic rating if the borrower has none) and adjustments for ranking, security and fees. Tax advisers or dedicated transfer pricing tools derive the rate. TreasuryView then holds the agreed terms and calculates interest, accruals and balances on them.
How do I track intercompany loan interest across entities without Excel?
TreasuryView holds each intercompany loan once and calculates interest, accruals and balances per loan for any reporting date. You can report outstanding principal, interest and accruals by entity and country, and see upcoming rate resets for floating rate loans before they apply.
Sources and further reading
Sources last checked on 11 November 2026. They are external and not written by TreasuryView.
- § 1 Außensteuergesetz (AStG), the German statute on the arm's length principle, including the rules for cross-border financing (in German)
- OECD transfer pricing, the OECD Transfer Pricing Guidelines, with Chapter X on financial transactions
- What are transfer prices? by smartZebra, an overview of scope, related parties and the arm's length principle (in German)
- Arm's length interest rates and credit spreads by smartZebra, how a rate is derived from a reference curve, a synthetic rating and loan features (in German)
This page is for general information and does not replace tax or legal advice for your situation. As of November 2026.
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