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Get efficient and effective support from recognised legal experts who will support your existing tax and transfer pricing relationships.

I really like the format! It is very clear and easy to follow. Can you teach our lawyers to write so clearly? I wonder sometimes if they are being paid by the word.

— Brian Sturtz, Former Director of International Tax and Transfer Pricing, Walmart Stores, Inc., commenting on template Intercompany Agreements created by LCN Legal

Intercompany Agreements are a fundamental part of Transfer Pricing compliance

It has long been accepted that Transfer Pricing Agreements – also known as ‘Intercompany Agreements’ or ‘ICAs’ are a fundamental part of Transfer Pricing compliance. The central importance of ICAs was re-emphasised by the 2017 edition of the OECD’s Transfer Pricing Guidelines:

Importantly, ex ante contractual assumption of risk should provide clear evidence of a commitment to assume risk prior to the materialisation of risk outcomes. Such evidence is a very important part of the tax administration’s transfer pricing analysis of risks in commercial or financial relations, since, in practice, an audit performed by the tax administration may occur years after the making of such up-front decisions by the associated enterprises and when outcomes are known.

— OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, 2017 edition, p 63

The need for Intercompany Agreements can be even more acute if the group or groups you look after are subject to an imminent Transfer Pricing audit or challenge. Not having appropriate agreements means that you are unable to clearly ‘delineate the actual transaction’, meaning that you will be on the back foot when attempting to defend the group’s Transfer Pricing position.

Not having a written agreement may be like giving the tax authority the right to access your bank account so it can withdraw what it considers to be fair. This is so even if you provide transfer pricing documentation.

— Mayer Brown

Poor Intercompany Agreements can be worse than having none at all

We often encounter groups which have poor Intercompany Agreements, prepared by lawyers who are not familiar with the requirements of Transfer Pricing compliance. In many cases, those agreements are overly long, and contain complicated boilerplate provisions, with the commercial terms hidden in definitions, schedules and appendices. Because the agreements are so long and legalistic, they are unlikely to be actually read by the key stakeholders within the group – meaning that they are unlikely to match the way the group actually operates.

At the other end of the scale, we come across groups who are using hand-me-down agreements which don’t meet the basic requirements for legal enforceability, and which do not accurately reflect the allocation of risk within the group.

Both types of agreement can be worse than having no agreements in place at all, because they are incapable of documenting an effective allocation of risk. They undermine the overall credibility of the group’s Transfer Pricing documentation.

Get help from the recognised experts at LCN Legal

Featured legal publication logosOur team at LCN Legal are recognised as experts in Intercompany Agreements. We have been asked to contribute to respected publications such as Tax Journal, TP Week, Tax Adviser Magazine, Accountancy Magazine, Today’s General Counsel and the Lexis Nexis Online Resources for Transfer Pricing.

We don’t advise on tax, transfer pricing, comparables analysis or economic analysis, so we don’t disturb your existing tax relationships – in fact, we support them. Our specialist lawyers are based in the UK and work with clients internationally to design, implement and maintain appropriate Intercompany Agreements. We use tried and tested templates, developed over a period of years working alongside multinational groups, to create agreements which are effective and easy to read. Where necessary, we create bilingual or multilingual versions, and adapt them to local law.

We give you a choice of three levels of support, to suit your needs:

  1. A toolkit of template intercompany agreements which you can adapt yourself – giving you the reassurance that you are working from documents which have been specifically created for the purpose and update, rather than hand-me-downs or freebies with no assurance of quality or relevance.
  2. Template agreements which we tailor for your group, using our standard documents and following a streamlined procedure to minimise the time you need to spend with us to finalise the documents.
  3. Full service legal support, including aligning the legal design of intercompany agreements with regulatory, corporate governance and risk objectives, hands- on support with due diligence and implementation, and assistance with setting up ongoing processes and reviews of intercompany agreements and the corporate structures to which they relate.

Request a free and confidential consultation

If you need help, and you can’t afford to waste time explaining to lawyers what terms like CUP, TNMM and DEMPE analysis mean, call us on +44 20 3286 8868 or email us at for a free consultation. We will get the job done for you without unnecessary fuss, and without giving you hundreds of pages of legalese.

To make your free consultation as productive as possible, complete this form and email it to us at when you request your consultation.

Further reading

Briefing on Intercompany Agreements for Finance, Tax and Transfer Pricing Professionals (free download)