There is not a single requirement that applies to all transfer pricing agreements in all jurisdictions. Even the OECD does not provide specific guidelines on what information to include in transfer pricing agreements. It makes sense. Its guidelines are aimed at countries around the world that have different legal systems and priority areas. The content of intercompany agreements depends largely on the nature of the controlled transaction and the jurisdictions in which the controlled transactions take place. Complex controlled transactions, such as the licensing of intellectual property. B require detailed contracts. Contracts for simple controlled transactions, such as the provision of administrative services, are. B can be maintained easily. Because companies do not benefit from internal transactions, it is necessary for companies to define and document potential internal transactions. The purpose of an intercompany agreement is to document transactions between departments or subsidiaries of a company, so that the parent company or organization can make decisions based on established financial results.
It also contributes to compliance with laws and regulations such as Section 482 of the IRS and OECD BEPS tax code, as well as to the sharing of risks and responsibilities. Nevertheless, there are essential requirements to be included in each intercompany contract: the important clauses to be included in the simple intercompany agreement are: An intercompany agreement (also known as an “intragroup agreement” or “transfer pricing agreement”) is a contract (signed) between two or more associated companies. This contract governs the terms (CG) of controlled transactions, such as the provision of goods or services from a company linked to another associated company. Intercompany agreements should include the effective date of the agreement, the names and descriptions of the parties, the relationship between the two parties and those of the parent organization. Since it is not possible to publish a model covering all the specifics of each country, we advise you to check with your internal or external consultant if changes are needed. If necessary, we can review the agreement or create one for you for a fee. It is important to ensure that intercompany agreements respect reality, comply with transfer pricing documentation and comply with market standards.