Top Ten Pitfalls relating to Intercompany Agreements for Transfer Pricing

This article appears in the March issue of our International Corporate Structures Newsletter.

1. No agreements / missing agreements / unsigned agreements

2. Key terms missing (subject matter, price)

3. Duplication of agreements for the same supply

4. Agreements don’t match the way the group operates

5. Agreements too long / hard to understand

6. Agreements don’t match ownership and flow of IP

7. No provisions for allocation of cost between multiple service recipients

8. Warranties and indemnities reflect inappropriate risk allocation

9. Inappropriate termination provisions

10. No paper trail to reflect consideration given to the agreements by subsidiary boards