Intercompany Agreements For Transfer Pricing

2. Consistency with functional analysis: verify that the contractual conditions are consistent with the functional analysis that underpins the transfer pricing policy that the group intends to conduct. These include LCN Legal which is the leading legal advisor that helps multinationals and transfer pricing advisors establish effective intercompany agreements to comply with transfer pricing. We regularly conduct workshops and seminars and advise on the design, implementation and maintenance of intercompany contracts. If you need help implementing intercompany agreements, please call us on +44 (0) 20 3286 8868 or email us at info@lcnlegal.com. Click here for an overview of our services related to intercompany contracts. If you need transfer pricing intercompany agreements for your controlled transactions, we have something for you. Transfer pricing agreements between related companies need to be formalised in intercompany agreements in order to make them legally binding, comply with transfer pricing legislation and ensure an adequate line of defence against challenges from tax authorities. If you don`t, your business is exposed to serious and unnecessary risk.

* global agreements – in which a single document is concluded between several entities. For example, a parent company (P) may provide similar services at headquarters for a number of subsidiaries (S1, S2, S3, etc.). Agreements may be reflected in a single agreement signed by P, S1, S2 and S3. This Agreement may define the nature of the services provided, the legal conditions of delivery, the method of determining the fees to be paid to P and the method of allocating the royalties between S1, S2 and S3; Finally, inter-Contractual agreements must be legally binding. From an English legal point of view, it is not difficult to achieve this, as there are few formal requirements. (Notable exceptions are ground transportation, leases, warranties, and documents that give powers.) However, the key terms of the agreement must be `legal certainty`. This applies in the first place to the description of the delivery and the price of the delivery, so that these provisions must be objectively achievable on the basis of the contractual conditions. * a series of brief “contractual plans” signed between P and S1, P and S2, etc. These plans would define the particular pricing and other conditions that apply to each subsidiary, as well as any special conditions that suspend the standard conditions. Each contract plan would relate to the standard conditions and incorporate them into the agreement by reference, so it is not necessary to set the standard conditions every time entirely.

Intercompany agreements are legal agreements defining the conditions under which services, products and financial support are provided between related parties. For international groups, intercompany agreements are the essential basis for compliance with transfer pricing rules (the international rules that determine where profits are taxed) and for minimising the risk of double taxation. . . .