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Indirect Cost Agreement Template for Netherlands

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Key Requirements PROMPT example:

Indirect Cost Agreement

"I need an Indirect Cost Agreement for allocating shared IT and administrative costs between our Dutch parent company and three European subsidiaries, with implementation planned for March 2025, ensuring compliance with both Dutch and EU transfer pricing regulations."

Document background
The Indirect Cost Agreement is essential for organizations operating in the Netherlands that need to establish a clear and compliant framework for sharing and allocating indirect costs between different entities or business units. This document becomes particularly relevant in group structures, shared service arrangements, or joint ventures where common costs need to be distributed fairly and transparently. The agreement must comply with Dutch legal requirements, including the Dutch Civil Code, tax regulations, and accounting standards. It typically includes detailed methodologies for cost identification, calculation, and allocation, along with provisions for reporting and verification. The document is crucial for maintaining tax compliance, especially regarding transfer pricing regulations, and helps prevent disputes by providing clear procedures for cost sharing arrangements.
Suggested Sections

1. Parties: Identification of the contracting parties, including full legal names and registration details

2. Background: Context of the agreement, business relationship, and purpose of the indirect cost allocation

3. Definitions: Detailed definitions of terms, including types of indirect costs, allocation keys, and calculation periods

4. Scope of Agreement: Details of what costs are covered and the business activities to which they relate

5. Cost Categories: Classification and description of different types of indirect costs covered by the agreement

6. Allocation Methodology: Detailed explanation of how indirect costs will be calculated and allocated between parties

7. Calculation Period and Timing: Specification of the periods for cost calculation and timing of allocations

8. Payment Terms: Terms and conditions for payment of allocated costs, including invoicing procedures

9. Reporting Requirements: Requirements for reporting and documentation of indirect costs

10. Audit Rights: Provisions for auditing and verification of cost calculations

11. Confidentiality: Provisions regarding the confidentiality of cost information and business data

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

13. Governing Law and Jurisdiction: Specification of Dutch law as governing law and jurisdiction for disputes

14. General Provisions: Standard legal provisions including amendments, assignments, and notices

Optional Sections

1. Transfer Pricing Compliance: Required when agreement is between related entities and must comply with transfer pricing regulations

2. Tax Gross-Up: Optional section for cases where tax implications need to be addressed in the cost allocation

3. Service Level Requirements: Needed when indirect costs relate to specific service levels or performance metrics

4. Force Majeure: Optional inclusion for handling cost allocation during extraordinary circumstances

5. Step-In Rights: Required when one party needs rights to take over certain functions in specific circumstances

6. True-Up Mechanisms: Optional section for adjusting cost allocations based on actual versus estimated costs

7. Data Protection: Required when cost allocation involves processing of personal data under GDPR

Suggested Schedules

1. Schedule 1 - Cost Categories and Allocation Keys: Detailed list of indirect cost categories and specific allocation keys for each

2. Schedule 2 - Calculation Methodology: Technical details of cost allocation calculations and formulas

3. Schedule 3 - Reporting Templates: Standard templates for regular cost reporting and documentation

4. Schedule 4 - Service Levels: Detailed service levels and performance metrics if applicable

5. Schedule 5 - Contact Details: List of key contacts for cost allocation administration and disputes

6. Appendix A - Sample Calculations: Examples of cost calculations for different scenarios

7. Appendix B - Required Documentation: List of documents required for cost verification and audit

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






































Clauses

































Relevant Industries

Manufacturing

Professional Services

Technology

Financial Services

Healthcare

Retail

Energy

Telecommunications

Logistics

Construction

Pharmaceutical

Consumer Goods

Relevant Teams

Finance

Legal

Tax

Compliance

Treasury

Accounting

Corporate Development

Operations

Shared Services

Internal Audit

Financial Planning & Analysis

Risk Management

Relevant Roles

Chief Financial Officer

Financial Controller

Cost Accounting Manager

Transfer Pricing Specialist

Legal Counsel

Tax Director

Finance Manager

Operations Director

Shared Services Manager

Group Controller

Compliance Officer

Treasury Manager

Corporate Finance Director

Business Unit 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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