In June 2026, the OECD published a draft amendment to the transfer pricing guidelines for intra-group services. The consultation period ended on 22 July, and the OECD published the comments received on 24 August. The next step will be to discuss the results of the consultation in November.
The aim of the draft is not to introduce new rules, but to clarify and simplify the current guidance. The OECD also wants the rules on intra-group services to be more in line with the rest of the transfer pricing directives, so it has included several practical examples.
The change may be interesting because of the services regularly accounted for within the company groups, as in these cases the biggest question is often not the fee of the service itself, but whether the service actually took place, who benefited from it, how the costs were divided and how the fee applied can be substantiated.
When is an activity considered an intragroup service?
One of the most important questions remains whether there was a service at all that another company in the group has to pay for.
Based on the draft, it is not enough in itself that one group member performs some activity for the other group member. It must be examined whether the activity represents an economic or business advantage for the other company. To put it more simply, if an independent company would be willing to pay for it in a similar situation, or would perform the activity itself, then there is a good chance that it is a service.
In practice, this can affect a number of activities that are common within the company group. Such can be, for example, HR, IT, financial, accounting, legal or administrative support.
However, it is important to note that not all activities carried out for the benefit of another company in the group result in an automatic service fee. For example, if a group member enjoys an advantage simply because of belonging to the group, this does not necessarily constitute a service in itself.
Cost allocation remains an important issue
In groups of companies, it is common for a central company to provide the same service to several group members. In this case, it is not always possible to assign the costs incurred directly to a single company.
This is what the allocation of costs is for. According to the draft, the proportion on which the allocation is based must reasonably reflect the extent to which each undertaking is expected to benefit from the service.
This does not necessarily mean the same for all services. For example:
- In the case of HR services, the number of employees can be a good starting point;
- in the case of IT services, the number of users;
- in the case of motor vehicle services, the number of vehicles;
- For some accounting services, the number of transactions processed.
The point is therefore not that there should be a generally accepted allocation key, but that the method used is reasonably linked to the benefit derived from the service.
This is also important for documentation: according to the draft, the company must justify why it chose the given allocation key and how it applied it.
Cost-plus- method cannot be automatically used in case of services
The draft also points out that the fee for intra-group services cannot always be determined by simply calculating a profit margin on the costs incurred.
When determining the appropriate price, the characteristics of the given service must be taken into account. For example, a simple administrative support can be different from a service that requires significant expertise.
This is important because the range of services within the group is extremely wide. Obviously, payroll accounting performed by a central company and a research and development service should not be priced in the same way.
Special attention will be paid to low-value adding services
One of the more practical parts of the draft deals with the so-called low-value intra-group services.
This can typically include support activities such as certain accounting and financial tasks, HR and payroll support, general administration, certain IT services, legal or tax administration assistance.
For these, the OECD would continue to maintain a simplified approach. If the service meets the required conditions, a 5% mark-up may be applied to the relevant costs and no separate comparative study is required.
However, it is important to note that a profit margin of 5% is not a general rule for intragroup services. The simplified approach is only applicable to low-value services. For other types of services, the appropriate mark-up should be determined separately, taking into account the characteristics and circumstances of the service in question.
This is also important because the mere fact that a service is not included in the category of low-value services does not automatically mean that a profit margin of more than 5% must be applied. The appropriate rate must be examined on a case-by-case basis.
In practice, this can be especially important for groups of companies that account for several services between each other.
Documentation is also required for the simplified method
Simplification does not mean that the business does not have to support anything.
According to the draft, the following must be documented, among other things:
- what services they provide;
- who will benefit from them;
- why they are considered low-value services;
- the benefits they bring to the beneficiary businesses;
- what costs make up the settlement;
- what allocation key was used and why;
- what profit margin was applied;
- and the calculation of costs and allocation.
At the same time, the draft also contains practical facilitation: if the conditions of the simplified method are met, then in the case of a payroll service, for example, it is not necessary to prove each of the tasks performed separately. It may be sufficient to present the category of the service and to prove that the service was actually provided. A properly prepared annual invoice may also be sufficient to support the settlement.
What does this mean for companies?
Although the current document is still a draft, its contents provide a good opportunity for the groups of companies to review their current practices.
For example, it is worth examining:
- what services are accounted for between group members;
- whether all service fees are really justifiable;
- whether the benefit of the service has been properly documented;
- how the allocation of common costs was determined;
- whether the allocation key used is justified;
- whether the passed-on costs have been properly separated;
- and whether the 5% simplified method is only applied to services that actually meet the required conditions.
This may be particularly important in the case of groups of companies where the central company regularly accounts for HR, IT, finance, accounting or other support services to the Hungarian member company of the group.