Transfer Pricing > Intragroup Services - Benefit Test
Intragroup Services - Benefit Test
According to the OECD Guidelines, to talk about an intragroup service it is necessary that there is an economic or commercial interest for the entity that receives this service and the fact of receiving such benefit means a benefit in its commercial position.
In that sense, it is important to indicate that the transfer pricing regulations of several countries in the region have incorporated the “Profit Test”, in which companies are required to provide the documentation and information requested by the Tax Administration, as necessary conditions for the deduction of the cost or expense of result from the provision of intragroup services.
The “Profit Test” will be fulfilled when the service provides economic or commercial value to the recipient of the service, improving or maintaining its commercial position. In this way, the taxpayer must document and provide information that demonstrates the effective provision of the service, its nature and the actual need for it, the costs and expenses incurred by the service provider, as well as the reasonable criteria for assigning said costs and expenses.
We provide the service of review and evaluation of all “intragroup service” operations in order to be prepared for compliance with the Benefit Test an additional requirement for the deductibility of costs and expenses arising from this type of operations.
Fact to be accredited
Effective service provision
Contract detail documents (Contract)
Results of the Reports
Compliance of the Reports
Work plans, implementation plans
Nature of the service provided
Financial, technological, scientific, mining, commercial, among others.
Real need for the service
Impact of the service in improving the operability of the service recipient.
The service can produce a potential advantage (medium or long term in the utility of the receiver)
Costs and expenses incurred by the service provider
Cost of identification
Expense of identification
Markup Identification (Margin)