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Intercompany Current Account Agreement


04.09.21 Posted in Uncategorized by

LCN Legal is the leading legal advisor that assists multinationals and transfer pricing advisors in establishing effective intercompany agreements for transfer pricing compliance. We regularly take workshops and seminars and advise on the design, implementation and maintenance of Intercompany agreements. If you would like help implementing the Intercompany agreements, call us on (0) 20 3286 8868 or email us at info@lcnlegal.com. Click here for an overview of our services regarding intercompany agreements. 7. Horizontal coherence: If the pricing of the supply under the agreement is to be aligned or differentiated with other similar deliveries, ensure that the terms of the agreement are similar or differentiated. This is particularly the case for internal comparisons. BlackLine`s intercompany hub centralizes end-to-end intercompany accounting management to reduce complexity and risk, streamline processes and achieve overall transparency. It was designed to eliminate the so-called largest bottleneck for a quick and accurate global financial agreement with an integrated intercompany accounting process. Legal agreements should reflect an agreement that the directors of each participating company can duly approve in order to promote the interests of that company. (Agreements that result in common losses in a given company can be problematic.) In many ways, this fundamental principle – which focuses on the legal obligations of directors – can be seen, in a legal context, as the broader principle of harmonization of form and substance. See action 9 of the OECD`.B s Action Plan 9 on Base Erosion and Profit Shifting of 19 July 2013, which sets out the following objective: “Developing rules to prevent BEPS by transferring risk between group members or excessive capital allocation. These include adopting transfer pricing rules or specific measures to ensure that the company does not have inappropriate returns solely because it has taken contractual risks or provided capital.

Contractual risk management by a company that does not have the economic substance to support it is unlikely to be an agreement that company executives can duly approve. Cumulatively, they can drain valuable financial, accounting, tax and cash resources, create redundant work and unpaid balances, and increase exposure risk. In the case of a cash management agreement with one of the group`s entities, any company in the group may assign a mandate (cash management agreements) to another entity of the group (the parent company) to allow that company to manage its cash flow. Companies often believe that the relationship between companies within a group is unlikely to be tested and has therefore failed to invest in clear and legally sound intercompany agreements.



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