bilateral agreements – for which a number of two-way agreements are concluded. Like the aforementioned services at headquarters, separate agreements would be concluded between P and S1, P and S2, etc. and the conditions that are generally covered by intercompany agreements: Intercompany agreements are fundamentally different from third-party contracts (also known as commercial contracts). An intercompany agreement is signed by two companies that are part of the same group. Presumably they have the same objective: to increase the group`s result. They have the freedom to arrange the transaction as they see fit, and it is unlikely that there will be an argument. On the face of it, the Intercompany agreement is a formality. Intercompany agreements are contracts between two or more companies or activities owned by the same parent company.3 min. Finally, intercompany agreements must be legally binding. From a legal point of view, it is not difficult to achieve this, as there are few formal requirements. (Notable exceptions are land transfers, leases, guarantees and documents granting authority.) However, the main provisions of the agreement must have “legal certainty.” This applies primarily to the description of the delivery and the price of the delivery, so that these provisions must be objectively established under the terms of the agreement. Legal agreements should reflect an agreement that the directors of each participating company can duly approve in order to promote the interests of that company. (Agreements that result in common losses in a given company can be problematic.) In many ways, this fundamental principle – which focuses on the legal obligations of directors – can be seen, in a legal context, as the broader principle of harmonization of form and substance.

See action 9 of the OECD`.B s Action Plan 9 on Base Erosion and Profit Shifting of 19 July 2013, which sets out the following objective: “Developing rules to prevent BEPS by transferring risk between group members or excessive capital allocation. These include adopting transfer pricing rules or specific measures to ensure that the company does not have inappropriate returns solely because it has taken contractual risks or provided capital. Contractual risk management by a company that does not have the economic substance to support it is unlikely to be an agreement that company executives can duly approve. One of the advantages of intercompany agreements is that they help to separate the different financial statements and information statements of the two companies. All transactions have drawn individual services, so they do not collide. These agreements are useful when there is more than one department in the parent company. More details of the agreement are the date, the names of the companies and the transmissions of goods and services. An intercompany agreement is also useful to terminate a contract between two companies under the parent company. This article aims to clean up a guide to the implementation of intercompany agreements with minimal time and cost, which improve rather than undermine the group`s transfer pricing policy.

The importance of ICAAs, like other types of compliance documents, often occurs only when a group is held accountable for its regulatory or tax control acts without notice. For the most part, intercompany agreements can be structured in three ways: for groups with a very large number of companies participating in intercompany agreements, it may be advantageous to ensure the effective implementation of intercompany agreements through electronic signature. A number of proprietary solutions for this are available at a relatively low cost and do not require any software installed on the signatories` computers.