Transfer Pricing

Intercompany Service Fee Arrangements

Intercompany Service Fee Arrangements

NERA has developed a robust documentation framework for intercompany services that has been used successfully worldwide. This framework consists of a structured approach to valuing arm’s length service fees.

NERA's approach to documenting intercompany services begins with a thorough understanding of the functions and costs associated with the clients' relevant business units.

  • After performing a robust gathering of facts, we group costs into distinct service categories.
  • We independently review each service category to determine which costs are related to stewardship activities, routine activities, and non-routine services.
  • Service costs are then allocated to determine what portion of costs in each category is chargeable to affiliates. 
  • Arm's length fees for non-routine services are calculated rigorously through an economic benchmarking process that is expansive and comprehensive.
  • Finally, we integrate various elements of the structured approach to calculate total service fee charges for related parties.

NERA's structured approach to documenting intercompany service charges leads to increased defensibility under audit because all service fee charges can be traced back to their original source data.

  • We use routine accounting data that is created and maintained during the ordinary course of business, enabling our clients to easily update and maintain this framework in-house.
  • We rely upon information that is in the public domain and only employ analytical tests that are verifiable within the delivered documentation to provide our clients with work that has lasting value.
Name Title Location Phone Email
Dr. Yves Hervé Managing Director Frankfurt +49 69 710 447 508
Dr. Harlow Higinbotham Managing Director Chicago +1 312 573 2803
+86 21 6103 5544
+86 10 6533 4395
Dr. Emmanuel Llinares Managing Director
Head of Global Transfer Pricing
+33 1 70 75 01 93
+41 22 819 94 94
+44 20 7659 8650
Philip de Homont Director Frankfurt +49 69 710 447 502
Dr. Niraja Srinivasan Director Washington, DC +1 202 466 3510
Dr. Vladimir Starkov Director Chicago +1 312 573 2806
Nihan Mert-Beydilli Associate Director Los Angeles +1 213 346 3035
Yuko Saito Associate Director New York City
+1 212 345 1963
+81 3 3500 3378
Tom Braukmann Principal Frankfurt +49 69 710 447 511
Title Type Author
Managing Transfer Pricing in the COVID-Related Economic Downturn Published Article Dr. Harlow Higinbotham, Dr. Vladimir Starkov, Nihan Mert-Beydilli
Germany: The Changing Model of Group Financing Centres Published Article Yves Hervé, Philip de Homont and Georg Dettmann
NERA Experts Offer Insight into OECD Guidance on Financial Transactions White Paper Amanda Pletz, Ralph Meghames and Dr. Georg Dettmann
NERA Contributes to Bloomberg Tax Winter 2019 Transfer Pricing Forum Published Article Dr. Alexander Voegele and Philip de Homont
What Is the Value of Users, Anyway? How to Value the User Contribution to Digital Ent... Published Article Vladimir Starkov and Oceana Wang
Sustaining Contract R&D Service Solutions in a Post-BEPS DEMPE Context Published Article Dr. Yves Hervé, Philip de Homont
Implicit Support and Its Implications on Guarantee Fee Pricing: Fact or Fiction Published Article Amanda Pletz, Gary Lambert, Dr. Georg Dettmann, and Diana Kabir
NERA Experts Comment on the OECD Proposal for a “Unified Approach” under Pillar One Regulatory Filing Dr. Vladimir Starkov, Dr. Yves Hervé, Amanda Pletz, Dr. Emmanuel Llinares, Dr. Harlow Higinbotham, Pim Fris and Dr. Jacques Potin
How to Adapt to the DEMPE Concept When Using Third-Party Licensing Agreements for Tra... Published Article Dr. Yves Hervé, Philip de Homont
Transfer Pricing Challenges in the Digital Economy: A Case Study of the Internet of T... Published Article Dr. Niraja Srinivasan