OECD consultation on intra-group services

On 1 of June 2026 the OECD published a public consultation document proposing revisions to Chapter VII of the OECD Transfer Pricing Guidelines covering special considerations for intra-group services transactions – one of the most common types of transactions taking place within multinational group. 

The focus is practical: how to identify whether an intra-group service has been rendered, how to price it at arm's length, and what evidence should support the analysis. The OECD frames the work as an alignment exercise with Chapters I, II and III, supported by additional examples. The OECD states that the draft does not yet represent a consensus and invites stakeholder groups to comment. 

While more detailed analysis will follow subject to the consultation inputs, the below is designed as a helpful summary for Multinational Entities (MNEs) with seat or presence in Switzerland on the key focus points and impact areas.

Many Swiss-headquartered MNEs operate principal, HQ / Regional-HQ or shared service centre structures in which group entities provide and receive a broad spectrum of management, IT, finance, procurement, marketing and technical support services. The proposed guidance has several practical implications for such MNEs on both service provider and service recipient level:

• Stricter delineation within the substance-over-form analysis of the nature and type of services provided will be even more important to accurately determine the correct transfer pricing treatment of the service transactions

• Benefit Test – a key focus area in documentation as well as tax audits already today receives further clarification and guidance on the level of proof and support groups should collect to fulfil the benefit test. Key practical topics such as duplication of service functions between group and local entities level, or “on-call” services receive further guidance, including in the examples listed.

• The explicit rejection of Cost-plus Method as default — which will increase the focus on cases involving provision of higher-value or risk-bearing services, for example in connection with certain global functions (VP,  Head-of, C-Level) employed by Swiss Principal and HQ entities outside of Switzerland. 

• The clarified shareholder/stewardship boundary, including new guidance on which of such services could potentially be chargeable. This will require Swiss parents and sub-holdings to revisit which costs they currently recharge and which they bear as non-deductible shareholder costs. 

• Enhanced documentation expectations — contemporaneous evidence of benefits, deliverables, allocation-key rationales and cost-pool reconciliations — go beyond what many transfer pricing Local Files currently contain. 

• The “low value-adding intra-group services” (LVAIG) simplified approach remains largely unchanged, but Example 19 confirms that the 5% mark-up cannot be exported by analogy to non-qualifying services. 

The 2022 Guidelines already contain specific Chapter VII guidance on the two key questions: whether an intra-group service has been provided and whether the charge is arm's length. They also cover the benefit test, shareholder activities, duplication, incidental benefits, on-call services, direct and indirect charging, transfer pricing methods and the low value-adding services simplified approach.

The consultation does not replace those principles but reorganises and deepens them. The main changes are the explicit focus on delineation framework, a clearer concept of what constitutes a benefit, a stronger distinction between the benefit test and arm’s length pricing, more nuanced guidance on shareholder and duplicative activities, more detailed method selection and cost-base guidance, and a new documentation section. The low value-adding services “safe harbour” is largely maintained, with updated cross-references, including the 5% mark-up acceptability without a benchmark study, but only for qualifying services. The consultation paper includes an annex with 21 examples, which may provide to be useful in practice for both MNEs and tax administrations, subject to finalization of the consultation process.  

Stakeholders are invited to submit written comments by 22 July 2026. A public consultation meeting will be held at the OECD Conference Centre in Paris in November 2026.

Swiss based MNEs are encouraged to review the robustness of their current service cost allocation policies against these latest discussions. This may include: 

• Mapping of current intra-group service flows against the proposed delineation and benefit-test framework – what is the coverage of the services within existing intra-group agreements vs. existing transfer pricing documentation vs. actual operational practice ?

• Stress-testing the choice of transfer pricing method and the tested-party determination (e.g. are certain services to be remunerated under a cost-plus or an materially different approach, such as a profit split ?) 

• Reviewing shareholder-cost policies in light of the broadened guidance 

• Upgrading contemporaneous documentation to cover the identified focus areas