In other cases, it may not be possible to say that the corresponding regulations were already in place, but it may nevertheless be desirable to achieve a “retrodated” effect. In this situation, it may now be possible to reach an agreement with a historical “effective date.” For example, a group may move from a property sales model (where local subsidiaries hold or acquire the legal personality of the products concerned and resell them to commercial risk customers) to an agency model (in which local subsidiaries act only as introductory intermediaries and without credit or other commercial risks when selling the products). The seller/order giver may agree with local distributors to process the agreements as they had been in force since the end of the previous year. This could involve the implementation of dated agency agreements if they are actually signed. In particular, the agreements could provide for the distribution of revenues and risks by reference to the historical date of entry into force, adjusting payments accordingly. This type of agreement would not bind third parties, but it can be effective from an accounting and fiscal point of view depending on the time elapsed since the historically forecast date. It is important to ensure that intercompany agreements respect reality, comply with transfer pricing documentation and comply with market standards. The terms of the intercompany agreements must be compatible with the legal and economic ownership of the relevant assets. For example, an intragroup agreement in which a company claims to grant an intellectual property license that it does not have, strictly speaking, can create more confusion than promoting the group`s transfer pricing objectives. On the other hand, a third-party agreement is the result of negotiations on CT by two independent companies that protect their own interests. Normally, such an agreement is carefully crafted and reviewed before being accepted by both companies.
It is unlikely that any of the parties would be able to unilaterally dictate the CT of the agreement. For the most part, intercompany agreements can be structured in three ways: since we cannot publish a model covering all the specifics of each country, we advise you to check with your internal or external consultant if changes are needed.