However, there are fundamental requirements that must be included in any intercompany contract: in practice, companies often neglect intercompany contractual obligations. And even when intercompany agreements are concluded, they are often poorly formulated, obsolete and do not reflect the economic reality of the controlled transactions. The absence of (quality) intercompany agreements can pose a risk for a variety of reasons. These are the three most important: the content of intercompany agreements depends largely on the nature of the controlled operation and the jurisdictions in which the controlled transaction(s) take place. Complex controlled transactions, such as intellectual property licensing, require detailed contracts. Contracts for transactions that are easy to control, such as for example. B the provision of management services, can be kept simple. Intercompany agreements can cover a variety of controlled transactions. Here is an overview of the most common: In our course, we offer a more detailed description of these requirements.

We stress once again that the content of the intercompany treaty should be consistent with the three above-mentioned principles. The tax authorities are not convinced that Pjotr Plastic complies with transfer pricing laws. It intends to (i) verify whether the allocation of risks, assets and functions on which transfer pricing agreements are based is consistent with the actual agreements and (ii) whether related undertakings have accepted transfer pricing agreements. In the absence of intercompany agreements, Pjotr Plastic now has to provide further evidence and convince the tax authorities that its transfer pricing position is indeed the same as it claims – perhaps a tedious and costly discussion. This could have been avoided. (C) the Parties shall endeavour to implement a data processing agreement in accordance with the requirements of the existing legal framework on data processing and Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation). One day, the tax authorities knock on the door to inquire about transfer pricing agreements and their documentation. Pjotr Plastic informs them that there is documentation on transfer pricing, but no intercompany agreement proves that all related companies have accepted the transfer pricing agreements. The following example shows what can happen without a transfer pricing agreement: this data processing agreement is adapted from the ProtonMail DPA found on this page. Organizations can use the document below as part of their GDPR compliance….