ITAT Directs TPO to apply LIBOR Rate for Interest on Foreign Currency Receivables

The ITAT has directed the Transfer Pricing Officer (TPO) to apply the LIBOR rate for interest on foreign currency receivables in transfer pricing assessments. The case concerned the pricing of international transactions involving foreign currency loans. The tribunal held that LIBOR (London Interbank Offered Rate) is the appropriate benchmark for calculating interest rates in such cases. This ruling provides important guidance for multinational corporations and their tax advisers, ensuring that interest rates for intercompany loans are determined according to internationally accepted standards, avoiding potential tax disputes and ensuring fair pricing practices.