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Take advantage of our free expert resources, written by the experts at LCN Legal, based on their practical experience of working with multinational groups and their advisers across the globe. If you are interested in these areas, you may wish to bookmark this page to check back regularly for new information.

A view on the updated Austrian Transfer Pricing Guidelines

Paul Sutton

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: * clear * unambiguous * concluded in advance (See, for example paragraphs…

Intercompany Agreements

What good TP habits are easy to do, but easy not to do?

Paul Sutton

Whenever the going gets tough and my mind is looking to blame anyone but myself, I turn to the late, great Jim Rohn to get me back on track. Jim Rohn used to say that your philosophy is like the set of your sail. A small change can make a big difference to where you…

Intercompany Agreements

Lead contractor / subcontractor arrangements in transfer pricing

Paul Sutton

  This is a very common structure for multinational businesses which provide advisory services (such as management consultants, marketing services providers, PR agencies, engineering consultants, architects etc). And also for software providers, if they also provide software implementation assistance and charge for that separately. In this kind of scenario, the group entity which acts as…

Intercompany Agreements

Is it possible to ‘future-proof’ intercompany agreements?

Paul O’Regan

The short answer, unfortunately, is ‘no’. That’s because no price-setting TP policy, and no agreement, can anticipate all possible eventualities. So when circumstances change, the parties to an agreement (including an intercompany agreement) may need to renegotiate their relationship. This need to consider the possible renegotiation of intercompany agreements was specifically recognised in the OECD’s…

Intercompany Agreements

What are ‘waterfall’ clauses in intercompany agreements?

Paul Sutton

Amounts payable between related parties in accordance with transfer pricing policies sometimes need to be broken down into different elements. This may be because those different elements are treated differently for non-TP purposes – such as withholding tax, customs duties or sales taxes. A ‘waterfall clause’ is one way of doing this. The clause sets…

Intercompany Agreements

11 warning signs that the legal implementation of your TP policies may not be up to scratch

Paul Sutton

Spending time and money on TP policies and TP documentation, but not finishing the job and implementing them with appropriate intercompany agreements, is a bit like buying a Tesla Cybertruck and then fitting tyres which are old and bald. You’re leaving it to chance as to whether you’ll get the outcome you want in a…

Intercompany Agreements

Legal Implementation of Profit Splits in Transfer Pricing: Actual Profits vs Anticipated Profits

Paul Sutton

Some TP methods imply a drafting approach for pricing clauses in the intercompany agreements needed to implement them. An obvious example would be cost plus arrangements. Other TP methods do not necessarily imply a particular structure for pricing clauses. The transactional profit split method falls squarely within the second category. One of the reasons is…

Intercompany Agreements

What are legal ‘anchor points’?

Paul Sutton

Before you can create a TP policy, you need to identify your ‘anchor points’. Too often we see TP reports which have clearly not even attempted to understand the legal structure of the groups they are describing – such as which entities act as resellers or licensors, as opposed to internal service providers. Here’s why…

Intercompany Agreements

Free Guide: Effective Intercompany Agreements for TP Compliance

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