• +1 747 212 0206
  • +44 20 3286 8868
  • +86 21 2052 0623

Looking forward and back: our next live workshop and the TP Minds Americas conference

Intercompany Agreements

27 April 2022

I recently returned from Miami, where my colleagues Leiza, Ivan, Xiaofang and I participated in TP Minds Americas. It was a great conference: it was very refreshing to reconnect with friends and to take in the energy and atmosphere of a live event.

I’m now looking forward to our next live workshop tomorrow, on limited risk arrangements – the links to register are at the bottom of this message – and I’ve also taken some time to reflect on the conference. There’s far too much to say for one short newsletter, but I’d like to share six thoughts here. Most are focused on the legal implementation of transfer pricing through intercompany agreements (ICAs).

1. More and more people recognise that ICAs form an essential part of TP defence files. Ivan held a poll on this in a session he hosted: 76% of the respondents agreed that ICAs are often among the first documents required by tax administrations during TP enquiries and audits. In fact, in almost every session at the conference ICAs were mentioned as being critical.

2. We’re also seeing big changes in the way that MNEs approach ICAs in practice. For example, several MNEs told us that their policy is to put ICAs in place for every intercompany transaction – not merely those they regard as higher risk.

3. The interaction between TP and Customs issues came up frequently, including in a workshop I co-presented with BDO’s Yvonne Golby and Damon Pike. Licence fees for IP and charges for services can form part of the dutiable value for Customs purposes, depending on the fact pattern. So it’s essential to analyse the intended arrangements from a legal perspective and ensure that the ICAs are correct. This applies not just to the scope of the agreements, but also the nature of true up and true down payments (e.g. ‘market support payment’ vs rebate on the cost of goods). This is something we'll cover in our workshops tomorrow.

4. APAs still appear to be regarded as an effective tool in managing TP risk – despite the cost, effort, time and uncertainty involved. It’s critical for the taxpayer to ‘get its house in order’ prior to the application. This requires robust TP documentation, including appropriate ICAs for the relevant transactions.

5. It was fascinating to hear about the challenges in Latin America. Taxpayers and TP professionals there currently face four big problems: sluggish economies (with increased need for tax revenues), exchange rate volatility, a formalistic approach to TP documents, and tight reporting deadlines. And some local administrations impose specific additional requirements. For example, Mexico requires evidence of the ‘certain date’ on which ICAs are concluded (e.g. using a recognised e-signature service provider), and of course Colombia requires ICAs to be registered.

6. Unsurprisingly, many conference attendees were concerned about the continuing uncertainty regarding the application of BEPS 2.0 (Pillar One and Pillar Two). Some doubted that the new regime could ever replace national measures such as GILTI in the US. Others questioned whether it would even be implemented at all. We will have to wait and see. In the meantime I think that groups will continue to rationalise their structures, and will have an even lower appetite for tax planning.

I’m looking forward to discussing all of these issues with you in future. Before that, though, we have our next live workshop: I hope you’ll be able to join us for an analysis of the legal implementation of limited risk arrangements in transfer pricing. Click on the headings below to register.


Melbourne: 1500. China: 1400. Singapore: 1400. India: 1130.


BST: 1400. CET: 1500. USA Eastern Time: 0900.


Eastern Time 1500. Central Time: 1400. Mountain Time: 1300. Pacific Time: 1200.

We look forward to seeing you there.

Free insights

Get practical advice & insights on the Legal Implementation of Transfer Pricing for Multinational Groups

We won't share your details and you can opt-out any time. Learn more in our Privacy Policy

Article by
Paul Sutton
LCN Legal Co-Founder

Free Guide: Effective Intercompany Agreements for TP Compliance