Benefit Test
It is necessary to receive this service, according to the OECD Guidelines, an economic or commercial interest for the entity receiving it, which means a benefit in its commercial position.
Thus, it is important to indicate that the Transfer Pricing regulations of several countries in the region have incorporated the “Benefit Test“, which companies are required to provide the documentation and information requested by the Tax Administration, as necessary conditions for the cost or expense deduction resulting from the provision of Intra-group Services.
Benefit Test:
The “Benefit Test” will be met when the given service provides economic value for the service’s recipient, improving or maintaining its commercial position. Thus, the taxpayer must document and provide information demonstrating the effective rendering of the service, its nature and the real need for it, the costs and expenses incurred by the service provider, as well as the reasonable criteria for the allocation of such costs and expenses.
We provide the review and evaluation service of all the operations of “Intragroup Service” to be prepared to comply with the Benefit Test (TB), additional requirement for the deductibility of costs and expenses arising from this type of transactions.
| Fact to be accredited | Documentation |
|---|---|
| Effective rendering of the service | – Detailed contract documents (contract). – Results reports. – Compliance reports. – Work plans, implementation plans. – Corporate strategy. |
| Nature of the service provided | – Financial, technological, scientific, mining, commercial, among others. |
| Real need for the service | – Impact of the service on the improvement of the service recipient’s operability.
– The service can produce a potential advantage (medium or long term in the recipient’s utility). |
| Costs and expenses incurred by the service provider | – Identification of costs. – Identification of expenses. – Identification of the markup. |
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