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Do intercompany agreements align with TP policies? Three things to check

Intercompany Agreements

21 September 2022

Here's how to check that a group’s intercompany agreements (ICAs) align with its TP policies.

1. Identify the intercompany transactions types which feature in the group’s TP policies. If necessary, prioritise for risk and materiality.

2. Check samples of the ICAs actually in place for each transaction type. In each case, consider (i) whether subject matter of the ICA matches the transaction as delineated in the TP policies and also matches the group's legal / contractual model, (ii) alignment as regards contractual allocation of risk as stated in (or implied by) the TP policies, (iii) ownership of intangible assets, (iv) whether the pricing is clearly and unambiguously specified in the ICA in a way which aligns with the TP policies, and (v) whether the ICA specifies the correct parties, is signed and dated, not overly long, and is otherwise appropriate.

3. Check whether the portfolio of ICAs is comprehensive (covers all material transactions and all relevant entities), and is stored in a central online archive which can be accessed at short notice in the event of a tax or other audit.

If this type of assistance is not something which your firm is authorised to provide, our team at LCN Legal will be delighted to help.

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Article by
Paul Sutton
LCN Legal Co-Founder

Free Guide: Effective Intercompany Agreements for TP Compliance