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Transfer Pricing Agreements

Rick Bigelow's Profile

I know there have been several discussions surrounding the issue of transfer pricing, but I am curious if anyone has a transfer pricing or intercompany agreement template that they would be willing to share.  Following are some basics about the situation I am attacking;

US Based company looking to open subs in Latin America and Europe
The company provides online advertising optimization
The subs will initially be structured under the parent at a cost plus arrangement

I know there are numerous tax questions and other variable that need to be addressed but I am attempting to keep it as simple as possible under GAAP/IFRS and IRS requirements.  If that is even remotely possible.

Regards,

Rick

Answers

Edward Clarkson
Title: Managing Partner
Company: The Meade Group
(Managing Partner, The Meade Group) |

Rick, this will be a firm grasp of the obvious - the overriding principal for transfer pricing is that it is "arms length" pricing for the risks that the subsidiary is incurring. The lower the risk, the lower the transfer price. The test is what you would charge to a third party which is assuming the risks that your subsidiary is assuming.
Ted

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