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Intercompany Cost Sharing Agreement Template for Germany

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Key Requirements PROMPT example:

Intercompany Cost Sharing Agreement

"I need an Intercompany Cost Sharing Agreement under German law for a group of technology companies, with particular focus on R&D cost sharing and IP rights, covering our operations across Germany, France, and Poland."

Document background
An Intercompany Cost Sharing Agreement is essential for multinational groups operating in Germany to establish a legally compliant framework for sharing costs between related entities. This document type is particularly relevant when group companies share services, facilities, or resources and need to allocate the associated costs fairly and in compliance with German transfer pricing regulations. The agreement must adhere to German tax authority requirements, including the arm's length principle, proper documentation, and specific transfer pricing considerations. It typically becomes necessary when companies establish shared service centers, conduct joint development activities, or centralize certain functions within the group. The agreement helps prevent tax disputes, ensures proper cost allocation, and maintains transparency in intercompany transactions under German law.
Suggested Sections

1. Parties: Identification of the participating group companies, including their full legal names, registration details, and addresses

2. Background: Context of the agreement, description of the group structure, and business rationale for cost sharing

3. Definitions: Detailed definitions of key terms including Shared Costs, Cost Pool, Allocation Keys, Participating Parties, etc.

4. Scope of Agreement: Description of services and costs covered under the agreement

5. Cost Pool Determination: Definition of costs to be included in the sharing arrangement and methodology for cost pool calculation

6. Allocation Methodology: Detailed description of allocation keys and calculation methods for cost distribution

7. Payment Terms: Terms and procedures for settlement of allocated costs, including currency, timing, and payment methods

8. Documentation Requirements: Requirements for maintaining proper documentation to comply with German transfer pricing regulations

9. Accounting and Reporting: Procedures for accounting, reporting, and reconciliation of shared costs

10. Term and Termination: Duration of the agreement and conditions for termination

11. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes

Optional Sections

1. Tax Compliance: Specific section addressing transfer pricing compliance and VAT treatment - include when participants are from different tax jurisdictions

2. Intellectual Property Rights: Section addressing IP rights when R&D or technology-related costs are shared

3. Employee Secondment: Include when the agreement involves sharing of employee costs or secondment arrangements

4. Dispute Resolution: Detailed dispute resolution procedures - recommended for agreements with foreign group companies

5. Force Majeure: Provisions for extraordinary circumstances - recommended for long-term agreements

6. Confidentiality: Additional confidentiality provisions - include when sensitive cost information is shared

Suggested Schedules

1. Schedule 1 - Participating Entities: List of all participating group companies and their relevant details

2. Schedule 2 - Shared Services and Costs: Detailed list of services and costs included in the sharing arrangement

3. Schedule 3 - Allocation Keys: Detailed description of allocation keys for different types of costs

4. Schedule 4 - Service Level Requirements: Performance standards and quality metrics for shared services

5. Schedule 5 - Cost Allocation Examples: Practical examples of how costs will be calculated and allocated

6. Appendix A - Reporting Templates: Standard templates for cost reporting and documentation

7. Appendix B - Transfer Pricing Documentation: Required documentation format for German transfer pricing compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions








































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Relevant Industries

Manufacturing

Technology

Financial Services

Pharmaceutical

Automotive

Chemical

Consumer Goods

Energy

Telecommunications

Professional Services

Healthcare

Retail

Relevant Teams

Legal

Finance

Tax

Treasury

Compliance

Accounting

Shared Services

Corporate Development

Internal Audit

Risk Management

Relevant Roles

Chief Financial Officer

Tax Director

Head of Legal

Transfer Pricing Manager

Group Controller

Finance Director

Compliance Officer

Treasury Manager

Head of Shared Services

Group Accountant

Legal Counsel

Financial Controller

Tax Manager

Corporate Finance Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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