Beyond the 5% mark-up. Where low value-adding rules apply, and where they don't.

FAQ

Questions on transfer pricing for services.

• What is the 'benefit test' for intra-group services?

  The benefit test asks whether an independent enterprise would have paid for the same service or performed it in-house. OECD Chapter VII treats it as the threshold question — services that fail it cannot be charged at all, regardless of how the price is calculated.

• How does the low value-adding services safe harbour work?

  The safe harbour allows a 5% cost-plus mark-up on qualifying low value-adding services without a full benchmarking study, provided the services meet Chapter VII's exclusion criteria. The perimeter is narrower than practitioners often assume — it excludes core business functions and anything creating unique value.

• Is a June 2026 OECD consultation changing the rules for services?

  Yes. The OECD's 2026 Chapter VII consultation is reviewing the low value-adding services perimeter, with practitioners flagging that the current 5% safe harbour and benefit-test threshold may both shift. The practice tracks the consultation directly given its role advising on live filings.