In June 2026, the OECD released a public discussion draft proposing significant revisions to Chapter VII of the OECD Transfer Pricing Guidelines, which governs intra-group services. While final revised Guidelines have not been issued yet, given the OECD influence on local tax authorities, taxpayers should consider the direction the revised Guidelines is taking and assess transfer pricing policies and global compliance strategy in light of the evolving Guidelines.

Of note, the OECD explicitly states that these revisions are not intended to fundamentally change the general principles applied in the analysis of intra-group services. Rather, these revisions are intended to re-focus taxpayers on the proper analysis of intra-group services. Intra-group services are often treated as an afterthought in developing global compliance strategy, with taxpayers defaulting to a one-sided cost-based approach, such as a cost-based application of the transactional net margin method (“TNMM”) without proper consideration of whether this is truly the most reliable way to analyze a transaction. The proposed revisions to Chapter VII reiterates the importance of certain steps in an analysis, supported by an expanded set of examples.

What is changing

• Accurate Delineation of Transactions: Simply labeling a transaction a services transaction in intercompany agreements and invoices is not enough. The OECD reiterates that an analysis of what activities are actually being performed and how would independent companies price such activities must be considered before selecting a transfer pricing method. A proper functions, assets and risks (“FAR”) analysis supported by interviews and other documentation will be increasingly important for taxpayers’ to maintain. Taxpayers should also consider any interdependencies between a services transaction and other controlled transactions, reiterating that the guidance in Chapter III continues to apply when deciding whether to analyze a transaction separately or as part of a linked transaction.
• Benefit Test: Taxpayers should assess and document whether a controlled services transaction actually rendered a benefit to the recipient. While activities which are purely performed for the benefit of a shareholder remain non-chargeable, the revised guidance provides expanded guidance on the distinction between shareholder and stewardship activities. Further, the guidance is clear that merely because an activity is performed by executive leadership does not automatically deem it non-chargeable. Also note that a benefit does not need to be realized in the period under analysis but should be identified and reasonably expected at the time the transaction. Finally, note that the benefit test is independent from the assessment of whether an arm’s-length price has been charged.
• Allocation Keys: In instances where indirect charges are applied, taxpayers should be able to support that the allocation keys used are based on an appropriate measure of the usage and the expected benefit of the service.
• Most Appropriate Transfer Pricing Method: The proposed revised guidance is firm that a proper review and selection of the most appropriate transfer pricing method must be made and taxpayers should not simply default to a cost-based approach.

What taxpayers can do now

• Revisit the FAR analysis to ensure you have a full understanding of the controlled transaction(s) – everything else follows this analysis.
• Stress-test current intra-group service charges against the expanded guidance on the benefit test.
• Revisit allocation keys to confirm they reflect expected benefit at the level of each recipient entity.
• Reassess the transfer pricing method applied to confirm a proper consideration of the appropriateness of each method based on evidence related to the economic activities/value creation by the parties.
• Future-proof documentation now: while the proposed revised OECD Guidelines do not represent a sea change, they do point to the likelihood of increased scrutiny around the taxpayer’s treatment of intra-group services. Preparing proper documentation narratives – backed by a clean data trail and evidence supporting the narrative – is crucial in developing audit-ready global compliance strategy.
• Reach out to Aibidia: if you need some help understanding what this means for your Group, Aibidia’s professional services group is happy to assist you in stress-testing your current policies and building an audit-ready global compliance strategy.

Read the OECD's public consultation document: Revisions to Chapter VII of the OECD Transfer Pricing Guidelines

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