Most transfer pricing professionals agree that putting in place consistent intercompany agreements can support a group’s transfer pricing policies. Paul Sutton explains how to go about this effectively.
Most transfer pricing professionals agree that intercompany agreements can play an important role in supporting a multinational group’s transfer pricing policies.
They enable the tax function to set the starting point for discussions with local tax authorities as regards what supplies are made within the group and on what terms. In some jurisdictions post-year end ‘true-up’ type adjustments are only permitted if they are made in accordance with a legal agreement in force at the beginning of the relevant year.
Intercompany agreements are particularly important for arrangements relating to intangibles. As stated at para 67 of the OECD’s Revised Discussion Draft on Transfer Pricing Aspects...
