Intercompany Agreement Design

We design tailored intercompany agreements to support tax, transfer pricing and regulatory compliance, and to meet the requirements of the OECD Transfer Pricing Guidelines. We work collaboratively alongside transfer pricing and international tax professionals to ensure that multinational groups have effective, audit-ready and transaction-ready intercompany agreements.

Common agreement types include:

• Central support services agreements (e.g. finance, tax, legal and HR services)
• Management services agreements
• Local sales and marketing services agreements
• Shared services agreements
• Lead contractor / subcontractor arrangements for delivery of consulting-type services to third party customers
• Research and development (R&D) services agreements
• Sales agency and commissionaire agreements
• Appointment of limited risk distributors (including those remunerated on a target margin basis)
• Appointment of full risk / fully-fledged distributors
• Contract manufacturing and toll manufacturing arrangements
• Intellectual property licenses and intra-group franchises
• Transactional profit split agreements
• Cost sharing agreements (CSAs) and cost contribution agreements (CCAs)
• Platform contribution agreements
• Loan facility agreements (including term loans, revolving credit facilities and overdraft facilities)
• Intercompany debt in security form (including loan notes, Quoted Eurobonds, promissory notes and deep discount bonds / zero coupon bonds)
• Intra-group invoice financing arrangements (including invoice factoring and discounting facilities)
• Intra-group guarantees and other forms of security and financial support
• Cash pooling arrangements
• Secondment of staff and related mobility arrangements.

Intercompany agreements require specific contractual functionality in order to be effective (including the definition of the structure of remuneration and pricing, clear allocation of risk and clear ownership of intangible assets). For some intercompany transaction types, such as cost sharing agreements (CSAs), the applicable transfer pricing regulations are highly prescriptive as regards the content and timing of intercompany agreements.

Generic template agreements and third party agreements are generally not an appropriate starting point for the preparation of intercompany agreements, as they typically fail to include the functionality required, and often contradict and undermine the intended transfer pricing policies.