Intra-group services feature in most multinational groups and are a common transaction type in transfer pricing policies. Paul Daly and Duncan Nott (BDO) provide a practical guide.
Intra-group services – often the management and back office support every business needs – are among the most common transaction between connected parties. Most international businesses will have services provided from other parts of the group; and most of these are thought of as comparatively routine in that they do not carry much business risk and are not a key value driver.
However it would be a mistake to think that this makes setting and calculating service charges as routine and low risk as the services themselves.
Service charges are easy for tax authorities to spot and understand. A successful challenge can result in a tax deduction being denied while question marks over what should be a straightforward process...
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Intra-group services feature in most multinational groups and are a common transaction type in transfer pricing policies. Paul Daly and Duncan Nott (BDO) provide a practical guide.
Intra-group services – often the management and back office support every business needs – are among the most common transaction between connected parties. Most international businesses will have services provided from other parts of the group; and most of these are thought of as comparatively routine in that they do not carry much business risk and are not a key value driver.
However it would be a mistake to think that this makes setting and calculating service charges as routine and low risk as the services themselves.
Service charges are easy for tax authorities to spot and understand. A successful challenge can result in a tax deduction being denied while question marks over what should be a straightforward process...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
