Free Intercompany Transfer Pricing Agreement Template
Intercompany Transfer Pricing Agreement
I. Background and Purpose
This Intercompany Transfer Pricing Agreement ("Agreement") is executed on June 1, 2050, by and between:
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[Your Company Name] ("Party A"), a corporation formed under the laws of Arizona, located at [Your Company Address], and
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Eyefusion ("Party B"), a corporation organized under the laws of Arizona, with its office at Phoenix, AZ 85001.
The purpose of this Agreement is to set the parameters for pricing on goods, services, and intangible assets transferred between the two companies, in full compliance with tax laws and international standards.
II. Objectives of the Agreement
The primary goals of this Agreement are:
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To ensure fair and arm's length pricing for all intercompany transactions.
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To adopt pricing methods that comply with the OECD Guidelines and local tax regulations.
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To document the basis for transfer pricing applied across all related party transactions.
III. Pricing Methods
A. Determining Arm's Length Prices
All pricing for intercompany transactions will reflect prices that would be agreed upon between independent enterprises under comparable circumstances.
B. Preferred Transfer Pricing Methods
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Comparable Uncontrolled Price (CUP) method will be prioritized for tangible goods.
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For services, a Cost Plus Method will be used.
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The Resale Price Method may be employed if applicable.
C. Documentation and Compliance
Both parties agree to keep full records supporting the applied pricing methods, including cost structures, comparable analysis, and financial statements. These records will be available for tax audits if necessary.
IV. Types of Transactions Covered
This Agreement applies to the following categories of transactions:
1. Tangible Assets
The transfer of physical goods such as inventory, raw materials, and products will be priced according to the arm's length standard, with adjustments made based on production or market conditions.
2. Intangible Assets
Intangible assets, including intellectual property, patents, and proprietary technologies, will be transferred based on fair market value, through royalties or licensing agreements.
3. Services
Intercompany services such as legal, administrative, and technical support will be charged based on direct costs, with an added markup reflecting a fair rate of return.
V. Payment Terms and Conditions
A. Pricing and Adjustments
Prices for each intercompany transaction will be reviewed annually to ensure that they align with market conditions and comply with tax requirements.
B. Payment Schedule
All invoices issued under this Agreement will be due within 30 days. Payments made after this period will incur interest at a rate of 1.5% per month or the maximum rate allowed by law.
C. Currency of Payments
All payments will be made in US Dollars (USD) unless otherwise specified.
VI. Agreement Duration and Termination
A. Term
The Agreement shall commence on June 1, 2050, and remain in effect for a period of 5 years, unless terminated earlier.
B. Termination Rights
Either party has the right to terminate this Agreement by providing a 90-day written notice. If either party fails to comply with the terms, the other may terminate the Agreement immediately.
VII. Confidentiality Clause
Both parties agree to uphold the confidentiality of all sensitive information, including financial records, pricing models, and business strategies. This obligation extends beyond the termination of the Agreement.
VIII. Legal Framework
A. Governing Law
This Agreement shall be governed by the laws of Arizona.
B. Dispute Resolution
Any disputes arising from or in connection with this Agreement shall be settled through binding arbitration in Phoenix, Arizona, in accordance with the rules of the American Arbitration Association.
IX. Signatories
For [Your Company Name]:
Name: [Your Name]
Job Title: Chief Financial Officer
Date: June 1, 2050
For Eyefusion:
Name: Jewell Ward
Job Title: Chief Accounting Officer
Date: June 1, 2050
Contact Information
For questions or clarifications regarding this Agreement, please reach out to [Your Name] at [Your Email] or [Your Company Email].
