Sep 21, 2026
By Gabriela Páez, MAF
Tax Manager – EAS LATAM
Charges for administrative, accounting, financial, technology, or management services between related companies are common within multinational groups. Even so, proving that a service was actually provided and that the charge complies with the arm’s-length principle can become one of the most sensitive issues in a tax audit.
In June 2026, the Organisation for Economic Co-operation and Development (OECD) published for public consultation a proposed revision to Chapter VII of the Transfer Pricing Guidelines, which addresses intra-group services. The consultation ran from June 1 through July 22; the comments received were published on August 24, and the public meeting is scheduled for November 9, 2026.
Important: the text is still a public consultation document. It is not an effective amendment to the Guidelines and does not yet reflect a consensus position of the Committee on Fiscal Affairs. The OECD itself cautions taxpayers and tax administrations not to treat the draft as though it were an approved rule.
Reference document: 5% Safe Harbor for Intra-Group Services
What Is the OECD Proposing to Change?
The draft does not seek to change the general principles of transfer pricing. Instead, it aims to update and clarify how intra-group services should be analyzed: how they are accurately delineated, how arm’s-length compensation is determined, and what documentation is needed to support them.
In practice, companies should pay close attention to the following points:
Topic | OECD’s Proposed Approach | Practical Implication |
Existence of the service | A contract, invoice, or description such as “management fee” does not, by itself, prove that the service was actually provided. | Companies should retain evidence of the activities performed and their receipt by the beneficiary entity. |
Benefit test | It must be determined whether the recipient obtained, or could reasonably have expected to obtain, an economic or commercial benefit. | Companies should document why an independent enterprise would have paid for the activity or performed it internally. |
Shareholder activities | Costs incurred solely because of shareholder status do not constitute services provided to subsidiaries. | Parent-company consolidation and certain corporate or shareholder costs should not be allocated automatically. |
Duplication | In principle, an activity that merely duplicates a local function or a service purchased from a third party does not create an additional intra-group service. | The actual value added by the regional or corporate function should be identified, and any justified exceptions should be documented. |
Allocation keys | The allocation should reasonably reflect the benefit expected by each recipient. | The same allocation basis should not be used for every service without explaining how it relates to the benefit received. |
Documentation | The draft emphasizes the relevance of contemporaneous evidence of the service, the benefit, and the determination of the charge. | Emails, meeting minutes, reports, deliverables, contracts, calculations, and timesheets become increasingly important. |
Why the Allocation Key Matters
One of the document’s most practical topics is the selection of allocation keys. The OECD notes, for example, that personnel-related services could be allocated based on headcount; IT services, on the number of users; fleet management, on the number of vehicles; and accounting support, on the number of relevant transactions or assets. In certain circumstances, revenue may also be a reasonable allocation key.
The logic is straightforward: the selected basis should relate to the benefit each company is expected to receive, not merely to ease of calculation. The same key should also be applied consistently to services in the same category and from year to year, unless there is a valid reason for changing it.
Has the 5% Markup Changed?
No.
This point is especially important. The document itself states that the section on low-value-adding intra-group services carries forward the existing approach and has been revised only to update internal references.
Under the simplified approach, qualifying services continue to use a 5% markup on relevant costs, excluding pass-through costs. No benchmarking study is required to support that percentage within the simplified approach.
However, the 5% markup cannot automatically be used as a benchmark for every intra-group service. To qualify as a low-value-adding service, the activity must be supportive in nature, must not be part of the group’s core business, must not use or create unique and valuable intangibles, and must not involve economically significant risks.
Accordingly, the simplified approach excludes activities such as research and development, manufacturing, sales, marketing and distribution, financial transactions, natural resource extraction, insurance and reinsurance, and certain senior corporate management functions. The markup for those services requires a separate transfer pricing analysis and may be above, equal to, or even below 5%, depending on the facts and circumstances.
Documenting the Benefit Will Become Increasingly Important
The draft expands on the evidence that may be useful in supporting the existence and pricing of an intra-group service. The level of detail should be proportionate to the materiality and nature of the transaction, but the file should make it possible to clearly reconstruct what was done, who benefited, and how the charge was calculated.
· Expected benefit. An explanation of the economic or commercial value the recipient entity expected to obtain.
· Communications and approvals. Emails, meeting minutes, internal decisions, and coordination between the provider and recipient.
· Scope and deliverables. Contracts, timelines, presentations, reports, memoranda, advisory work, or samples of IT support tickets.
· Cost-base development. Identification of direct costs, indirect costs, and operating expenses, supported by invoices, receipts, and timesheets.
· Allocation and compensation. Support for the allocation keys, calculations applied, cost reconciliation, and segregation of pass-through costs.
Practical takeaway: the defense of an intra-group charge should begin when the service is provided—not when a tax audit starts.
For multinational groups operating in Costa Rica, the OECD’s proposed revision is a timely opportunity to review their intra-group services policies, particularly evidence of benefit, shareholder activities, potential duplication, cost bases, and the allocation keys used to distribute charges.
At EAS LATAM, our Transfer Pricing specialists can assist with reviewing and documenting related-party transactions in accordance with the OECD Guidelines and applicable Costa Rican regulations. Contact us.
References
OECD (2026). Public consultation on the revision of Chapter VII of the Transfer Pricing Guidelines.
OECD (2026). Special Considerations for Intra-group Services – Public Consultation Document (paras. 7.6, 7.13, 7.24–7.31, 7.71–7.73, and 7.90–7.95).