Intercompany Agreements Review

Intercompany agreements are a key element of transfer pricing compliance under both OECD Guidelines and local regulations. They form the formal basis for intra-group settlements and must accurately reflect how transactions are carried out in practice. A professional review ensures that the agreement mirrors the actual cooperation model, is aligned with the arm’s length principle, and remains consistent with the group’s transfer pricing documentation. This significantly reduces the risk of challenges during tax audits.

As part of the service, we prepare:

‍1. Identification of transactions and alignment with actual conduct: we begin by identifying all transactions covered by the agreement and verifying whether its scope reflects the real operational flows. This includes analysing the cooperation model, cost flows and risk allocation, and ensuring consistency with the Local File and the group’s TP Policy.

‍2. Arm’s length assessment: we verify whether the contractual terms correspond to market-based models, whether pricing aligns with the transfer pricing method applied (CUP, TNMM, cost-plus, etc.), and whether margins, royalties, interest or guarantee fees fall within arm’s length expectations. We also assess the alignment of risk and asset allocation with the functional profile of the parties.

‍3. Review of clauses relevant to transfer pricing: we analyse key provisions that influence the TP position — such as scope of services or supplies, responsibility and risk allocation, pricing mechanisms, allocation keys, adjustment rules, settlement procedures, termination clauses, or financial terms. The aim is to ensure that the agreement clearly supports the group’s TP position and does not introduce unnecessary tax risk.

‍4. Compliance with OECD Guidelines and local regulations: we assess the agreement’s consistency with OECD TP Guidelines (in particular Chapters I, VI, VII and VIII) and local tax legislation, including CIT/PIT provisions, TP documentation regulations, and standards relating to recharges, shared services and low-value-adding services. Any discrepancies or risks are clearly identified together with recommended corrective actions.

‍5. Recommendations and drafting of intercompany agreements: we prepare recommendations for amendments that enhance tax and compliance safety, ensure arm’s length alignment and strengthen the link between agreements and TP documentation. Where needed, we can prepare complete intercompany agreement templates for services, loans, guarantees, licences, cash-pooling, recharges, distribution, manufacturing or R&D arrangements.

‍6. Implementation support: we assist in implementing agreements across the group — including internal negotiations, alignment of accounting and controlling systems, staff training, and integration of agreements with the wider TP Policy and governance framework.

‍Client outcome: a reviewed and properly structured intercompany agreement ensures formal and economic compliance, minimises local and cross-border tax risks, guarantees consistency with Local File, Master File, TPR and benchmarking analyses, protects the group during audits, and strengthens internal processes and governance for years to come.