Intragroup Services – Benefit Test

According to the OECD Guidelines, an intragroup service depends on 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 regard, it is important to indicate the incorporation of “Profit Test” of the transfer pricing regulations of several countries in the region, 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 service recipient, improving or maintaining its commercial position. Thus, the taxpayer must document and provide information demonstrating 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.