This article looks into the transfer pricing aspects of intercompany loans. The author first considers the (rather limited) practical applicability of the OECD Guidelines and the relevance of domestic transfer pricing rules and documentation requirements. Then he deals with the practical difficulties in providing evidence of the arm's length nature of intercompany loans and the potential consequences of a non-arm's-length interest rate. Finally, methods to determine arm's length conditions and potential pitfalls in this process are discussed.