Document background
The Intercompany Recharge Agreement is essential for South African companies operating within a group structure where costs, services, or resources are shared between related entities. This document is particularly crucial in the context of South African transfer pricing regulations and tax compliance requirements. It is used when one group entity provides services, shares costs, or allocates expenses to other group entities, ensuring proper documentation of the arrangement for tax authorities and auditors. The agreement must comply with South African legislation including the Income Tax Act, Companies Act, and where applicable, exchange control regulations. It typically includes detailed methodologies for cost allocation, markup policies, and specific provisions for cross-border transactions if international entities are involved.
