6. Vertical coherence: If the agreement is part of a chain of deliveries of goods, services or licences, check that the draft agreement is in line with what is happening in the chain above and below the agreement. These include, if necessary, the final provision of IP goods, services or licences to customers. From the point of view of a group company in the United Kingdom proposing an Intercompany agreement, this agreement could well be important in the context of the company`s activities. The statutes of such a company generally provide that the company is managed by its directors, i.e. directors acting collectively by decision of the board of directors. In this case, it would be appropriate to consider the terms of the agreement at a board meeting, unless the board of directors has already delegated delegated authority to a single director or board of directors and the scope of the authority granted extends to this type of agreement. 2. Compliance with functional analysis: Check that the terms of the agreement are consistent with the functional analysis that underlies the transfer pricing policy that the Group intends to exploit.

This implies that the ideal position is clearly to conclude the intercompany agreement corresponding to the advance, as with any trade agreement. The options available depend on the terms proposed under the agreement and whether the rules can be said to be already in place. In our course, we offer a more detailed description of these requirements. We reiterate that the content of the intercompany contract should be consistent with the three principles discussed above. On the other hand, a third-party agreement is the result of negotiations on CT by two independent companies that protect their own interests. Normally, such an agreement is carefully crafted and reviewed before being accepted by both companies. It is unlikely that any of the parties would be able to unilaterally dictate the CT of the agreement. Companies are not able to take advantage of intercompany sales. It is therefore expected that the companies or departments of a parent company will pay for intercompany transactions by a specific method. The purpose of the intercompany agreements is to define how transfers take place and to determine, on the basis of financial results, what measures are needed for all parties involved. The content of intercompany agreements depends largely on the nature of the controlled transaction and the jurisdictions in which the controlled transactions take place. Complex controlled transactions, such as the licensing of intellectual property.

B require detailed contracts. Contracts for simple controlled transactions, such as the provision of administrative services, are. B can be maintained easily. Intercompany agreements are particularly important for intangible capital agreements. In point 67 of the OECD`s revised discussion on intangible capital transfer pricing of July 30, 2013, it states that “legal rights and contractual agreements are the starting point for any analysis of transfer pricing of transactions involving intangible assets … It is therefore good practice for related companies to set out in writing their decisions and intentions with respect to the allocation of significant rights to intangible assets. Finally, intercompany agreements must be legally binding.