Intercompany Agreement Tax Documentation
Every intercompany arrangement, a service charge between subsidiaries, a licensing arrangement for shared IP, an intercompany loan, is supposed to be governed by a written agreement whose terms actually match what's happening in the transaction, and both the agreement itself and the transfer pricing documentation supporting it, but agreements are often drafted once when the arrangement starts and never revisited as the actual transaction evolves, so a company can be operating an intercompany relationship for years under an agreement whose terms, or even existence, no longer accurately describes the current arrangement. A tax authority reviewing an intercompany transaction expects to see a written agreement whose terms are consistent with both the transfer pricing documentation and what's actually happening in the ledger, and a mismatch across any two of those three is a documentation weakness even if the underlying pricing itself is defensible.
STARTING PRICE
From €299
Standard tier · Multi-step workflow with AI extraction/decisioning and 2-3 integrations.
Get a quote →Saves roughly 3-6 hrs/month for a group with an active set of intercompany arrangements, plus a materially stronger position if intercompany transactions are examined.
How the automation works
We maintain a register of every intercompany arrangement that should have a governing agreement, and check that an agreement actually exists, is current, and remains consistent with the actual transaction terms recorded in the ledger and the applicable transfer pricing documentation, flagging any gap, a missing agreement, an expired one, or a term that's diverged from what's actually being charged or delivered. Agreement renewal or amendment needs are flagged ahead of expiry rather than discovered when an arrangement is already operating without current documentation, and any material inconsistency between the agreement, the actual transaction, and the transfer pricing support is surfaced for legal and tax review together, since resolving it usually needs both perspectives. Agreement terms are cross-checked against actual intercompany transaction flows quarterly, flagging drift between what the paperwork says and what the general ledger shows before an auditor or tax authority is the one to notice the mismatch.
Process flow
- 01
Register intercompany arrangements trigger
Every intercompany arrangement requiring a governing agreement, service charges, licensing, loans, is registered with its current agreement status.
- 02
Check agreement existence and currency ai
Each arrangement is checked for whether a current, unexpired agreement exists, flagging missing or expired agreements.
- 03
Cross-check terms against actual transactions ai
The agreement's stated terms are cross-checked against actual recorded transaction data and the applicable transfer pricing documentation, flagging material inconsistency.
- 04
Flag renewal needs and inconsistencies output
Agreements approaching expiry are flagged ahead of time, and any material inconsistency between agreement, transaction, and transfer pricing support routes to legal and tax review together.
- 05
Maintain the current agreement register output
The complete, current register of intercompany agreements is maintained as a single reference, ready for a tax authority or auditor request.
Inputs
- Intercompany arrangement register
- Current and historical intercompany agreements
- Actual intercompany transaction data
- Applicable transfer pricing documentation
Outputs
- Agreement existence and currency status per arrangement
- Flagged term inconsistencies against actual transactions
- Renewal alerts ahead of agreement expiry
- Current, audit-ready agreement register
Works with
Prefer a fully custom build instead of an off-the-shelf integration? We scope both options during your free consultation — most jobs like this one work fine on standard connectors, but higher-volume or non-standard systems sometimes need bespoke API work, reflected in the complex tier.
Where this goes wrong if you get it wrong
- An intercompany agreement drafted once at the start of an arrangement and never revisited as the actual business relationship evolves, a service scope that expanded, a pricing basis that changed, is a common gap that only surfaces when a tax authority compares the agreement's stated terms against what the transaction data actually shows, and by then the inconsistency itself becomes a documentation weakness regardless of whether the actual pricing is defensible.
- An intercompany arrangement with no written agreement at all, because it started informally or grew out of an existing relationship without anyone formalizing it, is a more basic but still common gap, especially for smaller or newer intercompany service flows that weren't planned as a formal arrangement from day one.
- A mismatch between the agreement, the transfer pricing documentation, and the actual ledger entries needs to be resolved with both legal and tax input, since fixing the agreement's language, updating the transfer pricing support, and correcting the transaction recording are three different remedies that might all be needed depending on which one is actually wrong.
- An agreement that's current and consistent with actual transactions in isolation but was never checked against the applicable transfer pricing documentation's described terms can still create the same kind of inconsistency finding, all three, agreement, transaction, and transfer pricing support, need to reconcile with each other, not just the agreement against the transaction alone.
Frequently asked questions
Does this draft or review intercompany agreements for us?
No, it maintains the register, checks existence and currency, and flags inconsistencies; drafting and legal review of the agreement language itself is your legal team's or outside counsel's work.
How does this catch an agreement whose terms no longer match the actual arrangement?
The agreement's stated terms are cross-checked against actual transaction data recorded in the ledger and against your transfer pricing documentation, flagging material divergence between what's written and what's actually happening.
What happens if an intercompany arrangement has no agreement at all?
It's flagged as a missing agreement in the register, giving legal and tax visibility to formalize the arrangement rather than continuing informally with no documented basis.
Does this replace our transfer pricing documentation process?
No, it's a related check that verifies the agreement itself stays consistent with your transfer pricing documentation and actual transactions; the transfer pricing analysis and documentation content are handled separately.