Maintaining intercompany agreements: If you rest too long …

To my shame, the grounds of Chateau Sutton are living proof of the Jim Rohn quote “If you rest too long, the weeds will take the garden.” We’ve been without a gardener for a while, and it seems that a mini forest of horse chestnut saplings has grown up in the front garden. Luckily we’ve lined up a new gardener, called Jake, who is ginger-haired and about seven feet tall. And hopefully he will sort it all out for us by the end of the week.

The need for ongoing maintenance applies equally to intercompany agreements for transfer pricing compliance. Based on the private discussion group we co-hosted with BDO last week, the time has long gone when intercompany agreements were regarded as ‘optional’ or ‘nice to have’. According to our guests – which included senior tax professionals from a number of household name groups – the key challenges include how to get the input and engagement they need from non-tax functions within the group, how to keep the length of agreements under control, how to achieve the right balance between granularity and flexibility, and how to keep the agreements updated as the group’s business model changes.

If you're working on a project to create or update intercompany agreements, you might find our project planning checklist helpful. Click here to download your copy.