Executive summary

On 1 June 2026, the Organisation for Economic Co-operation and Development (OECD) released a Public Consultation Document (the Consultation Document) on "Revisions to Chapter VII of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations" (2022 OECD Transfer Pricing Guidelines). The proposed revisions address the accurate delineation of intra-group services, the determination of the arm's-length charge and related conditions, and documentation considerations intended to supplement the guidance in Chapter V. New illustrative examples to aid practical application are also introduced.

Stakeholders are invited to comment on all aspects of the draft, including the extent to which the objectives of this work have been met. The Consultation Document also includes several specific questions for public commentators on matters for which input will be particularly valuable to Working Party 6 (on the Taxation of Multinational Enterprises) in preparing subsequent iterations of the draft. Comments are requested by 22 July 2026, and the OECD intends to hold a public consultation in November 2026.

The Consultation Document states that it reflects the views of the delegates of Working Party 6 but does not, at this stage, represent a consensus view of the OECD's Committee on Fiscal Affairs or its subsidiary bodies.

Detailed discussion

The OECD's Working Party 6 has been working to update and modernize the existing provisions in Chapter VII of the 2022 OECD Transfer Pricing Guidelines, which provide guidance on intra-group services.

The Consultation Document proposes a modernization and restructuring of Chapter VII to ensure alignment with the foundational principles set out in Chapters I, II and III of the 2022 OECD Transfer Pricing Guidelines. The revision preserves the general transfer pricing principles that govern intra-group services, but also seeks to improve clarity on delineation, the benefit test and documentation, and adds an extensive new Annex of illustrative examples to aid practical application.

Under the current 2022 OECD Transfer Pricing Guidelines, Chapter VII is organized into four sections: (a) Introduction; (b) Main Issues; (c) Some Examples; and (d) Low Value-Adding Intra-Group Services. The Consultation Document restructures the chapter into five sections plus an annex: (a) Introduction; (b) Accurate delineation of intra-group services; (c) Determining the arm's-length charge and other conditions of intra-group services; (d) Documentation; and (e) Low value-adding intra-group services, plus the Annex with examples.

Chapter VII Introduction

The revised introduction streamlines the chapter and clarifies that the guidance in Chapter VII applies to all types of intra-group services and should be read in conjunction with Chapters I to III. The introduction makes explicit that services commonly encountered in practice may include functions linked to revenue generation, such as research, development, production and marketing, and highlights that factors other than cost may justify the decision to secure the services within the group, including consistency of quality, economies of scale, specialization, provider reliability and protection of intangibles.

The text no longer repeats the prior cross-reference to Chapter VIII on cost-contribution arrangements and reframes the earlier discussion of mixed transactions and the boundary between transfers of intangibles and provision of services. It also clarifies the role of tax administrations by noting that authorities should not dictate how services are sourced; instead, their role is to determine the tax consequences and assess arrangements under the arm's-length principle. The revised version states that that contemporaneous evidence beyond the standard documentation in Chapter V may be used to substantiate intra-group services while additional information requests should be reasonable in light of materiality and compliance burden.

Accurate delineation of intra-group services

The revised section on accurate delineation of intra-group services emphasizes the importance of a thorough functional and factual analysis to identify the commercial and financial relations between associated enterprises. This analysis considers the economically relevant characteristics of the transaction, including the nature of the services performed, the functions performed, assets used and risks assumed by the parties involved. The guidance clarifies that the mere existence of a payment or a contract labeled as a service agreement does not, by itself, establish that an intra-group service has been rendered. Instead, the analysis must focus on whether the service provider has performed activities that provide an economic or commercial benefit to the recipient, consistent with the benefit test.

The updated section introduces enhanced clarity on the application of the benefit test and the need to consider interdependencies among intra-group activities and other controlled transactions.

In particular, the revision clarifies that the benefit test is part of the accurate delineation of the intra-group services transaction and should not be conflated with the determination of the arm's- length remuneration for the intra-group services, because the benefit test is not concerned with the amount that group members would be willing to pay.

In determining whether an activity meets the benefit test, the following considerations are indicated as relevant:

• A benefit refers to any economic or commercial value derived from the activity performed by another member of the group for one or more associated enterprises.
• The benefit may be obtained during or after the period in which the activity took place.
• The benefit should be identified and reasonably expected at the time of the transaction and should be sufficiently direct to be comparable to what an independent entity would be willing to pay.
• The benefit should be both factually possible and reasonably expected at the time of the transaction (but not necessarily guaranteed when the activity is performed).

Application of the benefit test is illustrated by reference to particular scenarios (which are not mutually exclusive):

• Shareholder activities (In this section, the Consultation Document expressly invites commentators to provide views on specified concepts related to "shareholder activities".)
• Duplication
• Incidental benefits
• On-call services

Finally, this revised section acknowledges that the accurate delineation may determine that the commercial or financial relations between associated enterprises involve the provision of more than one type of intra-group service. Further, intra-group services are sometimes linked to other related-party transactions. The revision refers to the principles for aggregation and segregation of transactions in Chapter III, as well as Chapter VI.

Determining the arm's-length charge and other conditions of intra-group services

The revised section on determining the arm's-length charge provides updated guidance on selecting and applying appropriate transfer pricing methods to intra-group service transactions. It emphasizes the importance of accurately delineating the service transaction before determining the arm's-length remuneration, ensuring that the pricing reflects the functions performed, assets used and risks assumed by the service provider. The guidance distinguishes between direct-charge and indirect-charge approaches, clarifying when each method is appropriate and how costs should be allocated and marked up to reflect an arm's-length price.

Relative to the 2022 OECD Transfer Pricing Guidelines, the updated section offers more detailed instructions on cost-allocation methodologies. In addition, the Consultation Document discusses the treatment of direct, indirect and operating costs in the context of applying cost-plus method and transactional net-margin method. It also highlights that the provision of intra-group services varies along a spectrum ranging from low value-adding services to services that may entail a greater level of complexity or integration. The Consultation Document provides that the transactional profit-split method can be applied in certain cases along that spectrum.

In this section, the Consultation Document specifically invites commentators to provide views on certain concepts related to allocation keys and the treatment of stock- or share-based compensation in relation to intra-group services (including timing, accounting treatment and valuation).

Documentation

This section supplements Chapter V ("Documentation") with guidance tailored to intra-group services while emphasizing that it does not create a mandatory checklist or new documentation standard. The level and detail of documentation should remain fact-and-circumstance driven and proportionate to the materiality and nature of the services, the section indicates.

The text identifies a range of contemporaneous evidence that can help demonstrate the benefit test. This includes, for example, an explanation of the expected benefit from the activities performed and, if that benefit does not materialize within a reasonable period, an explanation of the reasons and any related commercial decisions. Contemporaneous evidence can also include: communications between provider and recipient (e.g., meeting minutes, emails and internal approvals); technical documentation or service agreements describing scope and implementation; deliverables or outputs where they exist (reports, memos, IT tickets); and a clear breakdown of the activities performed.

For pricing, the Consultation Document notes that useful documentation includes a description of the process used to allocate costs under an indirect charge approach, with justification of allocation keys and detailed calculations, explanations for any discrepancies between costs allocated and costs incurred, and the procedures and criteria used to identify and allocate costs. It also highlights the importance of (1) explaining how the cost base was constructed, (2) distinguishing direct, indirect and operating costs (actual, budgeted or standard) with representative source documents and (3) providing a breakdown of pass-through versus marked-up costs and any invoices from external providers.

Low value-adding intra-group services

The section on "Low value-adding intra-group services" reflects the existing provisions in the OECD Transfer Pricing Guidelines. This content has only been updated with certain cross-references where necessary.

Annex 1 to Chapter VII

The Consultation Document includes a dedicated Annex I that contains 21 new examples intended to demonstrate the principles of Chapter VII. The examples are provided for illustrative purposes and are intended to enhance clarity and support the practical application of the guidance on intra-group services. However, the guidance also makes clear that the examples should not be taken as prescribing adjustments and arm's-length arrangements in actual cases or industries.

Implications

The Consultation Document contains important proposed revisions to Chapter VII of the OECD Transfer Pricing Guidelines, aimed at ensuring alignment with three principles in Chapters I, II and III and at providing practical illustrations through the inclusion of new examples.

The revisions are not intended to change the general principles underlying the transfer-pricing analysis of intra-group services.

Businesses may want to consider taking the opportunity to engage with the OECD and country policymakers through the ongoing consultation processes.