Interest Rates for Loans to Associated Enterprises Should Reflect Repayment Currency, Not Domestic Rates.

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Full Text of the Document

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....TP Adjustment - Interest on loans and advances given to the AEs - Interest rates vary and are thus dependent on the foreign currency in which the repayment is to be made and, therefore, domestic interest rate should not be applied for determining the interest rate in case of loans to be re-paid in foreign currency. - the ALP of interest shall be determined with reference to the interest rates applicable to the currency in which the loan has to be repaid. - AT....