It is no surprise that the OECD Guidance on Transfer Pricing Documentation and Country-by-Country Reporting issued on 16 September 2014 confirms that intercompany agreements (and the legal framework generally) play an important part in the transfer pricing documentation of a multinational enterprise.
Some of the specific references to intercompany agreements and the legal framework within which the group operates are set out below:
- Overview of the group’s legal context (as part of the overall global economic, legal, financial and tax context) (page 18)
- List of intangibles and which entities legally own them (page 28)
- List of important agreements relating to intangibles (page 30)
- Copies of material intercompany agreements (page 34)
Of course, the legal framework for the ownership of assets and the basis on which intra-group supplies are made, will need to be aligned with the economic and financial context of the group generally. This will be reflected in the master file, country by country reporting and local files. The legal framework will also need to be aligned with the way that the group interacts with third parties such as suppliers, customers and licensees – otherwise it will be essentially meaningless.
A checklist for reviewing or considering intercompany agreements for this purpose can be found in chapter 4 in our popular guide on how to put in place effective intercompany agreements. You can download your free copy of the guide by following this link: