The Austrian Transfer Pricing Guidelines (released in October 2021) are unusual in making specific reference to the standard to be met by intercompany agreements as part of TP documentation. You'll find them here.
In particular, the Austrian guidelines require that intercompany agreements are:
* concluded in advance
(See, for example paragraphs 16, 58 and 412 of the Austrian guidelines.)
You might think that all this is obvious.
After all, the converse would be an agreement which is “vague, uncertain and backdated” - which I assume that most people would instinctively regard as a sham, or at best a cynical going-through-the-motions approach to legal implementation of intercompany transactions.
But I think it’s fair to say that awareness of best practice in operational TP has changed hugely over the last 5 years.
There used to be a ‘keep it vague’ attitude to agreements (and TP policies, for that matter).
Now, there’s a recognition that substance, evidence and governance are key.
And that requires, amongst other things, intercompany agreements which are genuine agreements, and which make sense commercially.
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