The Document Automation Service enables users to create draft intercompany agreements for the transaction types listed below. Each of the links takes the user to an online questionnaire, which collects the information required to produce an agreement of the relevant type.
For services such as:
- central support services (including finance and accounting services, tax and legal services, HR management services, IT support services, etc.);
- procurement services;
- logistics services;
- marketing services; and
- R&D services,
where the relevant services are charged for on a cost plus basis.Start Questionnaire Now
As for the questionnaire above, but produces a bilingual agreement (English and Chinese). (Professional translations into other languages are available upon request.)Start Questionnaire Now
For scenarios where a ‘Principal’ (acting as entrepreneur) will appoint one or more ‘Local Sales Entities’ (or LSEs). Each LSE will:
- sell goods, software or services (or a combination of the same);
- act as principals (and not as agents) in relation to those sales; and
- make payments to the Principal so as to achieve an overall compensation calculated on a TNMM basis.
For the grant of licences, and entitlement to royalties, in relation to intangible assets such as trade marks, know-how, customer or user data, software, databases, patents, copyright works, designs and other intellectual property rights.Start Questionnaire Now
For arrangements where different entities within a group may from time to time act as ‘lead contractor’ in the provision of services to third party clients or customers, and may subcontract other members of the group to provide support services in relation to those client or customer engagements.Start Questionnaire Now
For term loans, revolving credit facilities and overdraft facilities which are unsecured, unsubordinated and for a single currency.Start Questionnaire Now
For the creation of an intercompany loan note instrument to document a controlled transaction.
It is suitable for a scenario where the debt is in the form of loan notes which are unsecured and transferable. The tool allows for the creation of a PIK note facility where required. Not suitable for deep discount bonds.
Additional transaction types are under development and will be released when available.
Why we created this new service
Many multinational groups struggle to put in place the contemporaneous, tax-audit ready intercompany agreements they need to support their transfer pricing policies. Typically, this is due to a number of factors such as lack of time, lack of budget and lack of specialist legal expertise. The result is that those groups are exposed to unnecessary risks including:
- inadequate TP compliance and documentation;
- adverse TP adjustments, due to failure to legally implement their TP policies; and
- fines and penalties.
In response to this issue, we have created a fast and cost-effective way to allow (i) transfer pricing and tax professionals to create effective intercompany agreements for their multinational clients, without giving legal advice for which they are not qualified or licenced, and (ii) in-house legal and tax teams to substantiate their transfer pricing policies by creating the intercompany agreements necessary for transfer pricing compliance.
How the Document Automation service works
Our Document Automation Service is an ‘execution only’ service which involves 2 simple steps:
- Use the relevant link(s) at the top of this page to access a simple online questionnaire that takes 5 to 10 minutes to complete, and collects the key details of the transactions involved.
- The system generates a tailored agreement which is delivered to you by email upon payment, based on the information you have provided. Each agreement is provided in Microsoft Word format and is fully editable.
If you need help creating multiple versions of the relevant agreement(s) for implementation across your group, please contact us directly for assistance.
The intercompany agreements(s) are provided in the English language and are governed by English law. Agreements governed by alternative governing laws, are available on request.
The price of each agreement is payable before the draft is released to you.
What functionality do these agreements provide?
Agreement functionality includes:
- Single and multiple service recipients
- Bilateral and multilateral agreement formats
- Retroactive agreements (to the extent possible in accordance with OECD TP Guidelines)
- Allocation of contractual risk between the parties
- Ownership of IP, including in work products
- Allocating control over delivery of services
- Multiple cost keys
- Multiple allocation keys
- Payment terms and interim payments
- Post year-end ‘true up’ and ‘true down’ provisions
- Options for treatment of default interest
What advantages does the Document Automation service offer, compared to the standard method of drafting Intercompany Agreements?
- Cost effective – prices start from GBP 1,750 per agreement (plus VAT if applicable)
- Fast – drafts are available upon payment
- Efficient – leverages the information already held by transfer pricing advisers or in-house tax teams. Avoids the time typically taken to brief lawyers who are not familiar with transfer pricing
- Effective – agreements benefit from LCN Legal’s world-leading expertise in intercompany agreements and feedback from a global community of leading transfer pricing professionals
Specialist assistance with ICAs for more complex supply chain and pricing structures (e.g., profit splits) and corporate restructuring is available in addition to the Document Automation Service.
What kinds of intercompany transactions is this service not suitable for?
The service is not suitable for transactions between unconnected parties.
For intercompany transaction types which are not covered by the document automation service, we provide bespoke legal support, often on the basis of fixed fees. Email us at firstname.lastname@example.org for further details.
GBP1,750 (plus VAT if applicable) per agreement, payable before the draft is released to you.
How to access the Document Automation Service
For each intercompany transaction type for which you need an Intercompany Agreement, use the relevant link at the top of this page to access the relevant online questionnaire.
About LCN Legal
LCN Legal is described by the UK’s Chartered Institute of Tax as “a world leader in creating legal substance for Transfer Pricing compliance”. Its co-founder, Paul Sutton, is the author of the book ‘Intercompany Agreements for Transfer Pricing Compliance – A Practical Guide,’ published by Law Brief Publishing.
The Document Automation Service is created and developed by our highly knowledgeable team of senior corporate lawyers, who have real world experience of corporate and commercial transactions and a detailed understanding of transfer pricing compliance.