OECD proposed revisions to intra-group services guidance: what taxpayers should watch

The Organisation for Economic Co-operation and Development (OECD) released a public consultation on 1 June 2026 proposing revisions to Chapter VII of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, which addresses intra-group services. The draft is framed as an effort to align the intra-group services guidance more closely with the foundational principles in Chapters I, II and III of the Guidelines, rather than as a fundamental change in direction. 

While the proposed revisions are broad in scope, they do not materially alter the existing framework for evaluating and pricing intra-group services. Instead, they place greater emphasis on appropriately defining and qualifying the services transaction before undertaking the economic analysis. For multinational groups, this means the practical focus is likely to be on evidence, consistency and audit readiness. 

Key point: The proposed revisions are less about introducing a new test and more about requiring taxpayers to demonstrate, with contemporaneous support, that an intra-group service was accurately delineated, provided a benefit and was priced in line with the arm’s length principle. 

Five matters taxpayers should watch due to OECD's proposed revisions

1. Accurate delineation and a more OECD rigorous benefits test 

The proposed revisions place greater emphasis on identifying the type of service performed, who performed the service, who benefited and whether the arrangement reflects the parties’ actual conduct. 

The current Chapter VII already considers the definition of a service transaction, including whether a benefit has been provided to the recipient. The proposed revisions build on this by adding content focused on accurately delineating and defining the transaction in the context of the overall functional analysis. They also caution against presumptions around benefits and methods of analysis, and describe different business arrangements and other factors that should be considered. 

These changes help bring Chapter VII into closer alignment with other sections of the Guidelines that have been revised following the Base Erosion and Profit Shifting project. In practice, taxpayers will need to be able to explain not only that a service charge exists, but why the underlying activity is properly characterised as a chargeable service in the context of the group’s wider commercial arrangements. 

The proposed revisions also expand the discussion of benefits testing. They include additional guidance on activities that may not satisfy the benefit test, such as duplicative, incidental or shareholder activities. Importantly, the draft clarifies that shareholder activities, duplication and incidental benefits are not separate analytical tests. Rather, they are common outcomes of the benefits test and should not be considered chargeable to related parties. 

This content is supported by a proposed annex to Chapter VII containing 21 new examples that demonstrate how the principles should be applied. Under the proposed revisions, taxpayers must demonstrate that the activity provided, or was reasonably expected to provide, economic or commercial value to the recipient at the time the activity was undertaken. 

2. Direct and indirect charging: clearer expectations towards OECD

The proposed revisions clarify the use of direct and indirect charge approaches while maintaining a preference for direct charging where services can be clearly identified and reliably tracked. 

Indirect charging remains permitted where direct charging is not possible. However, the draft places greater emphasis on ensuring that allocation keys reflect the expected benefit to each recipient, are based on reasonable and verifiable measures, and are applied consistently across recipients and over time.

The proposed revisions also recognise that multiple allocation keys may be used within a cost base, provided this does not result in double counting of costs. Taxpayers should expect a stronger need to document why an indirect approach has been used instead of a direct charge, and why the selected allocation methodology is appropriate for the services concerned. 

3. Pricing methods may require stronger support from the OECD

Method selection continues to follow the general principles in Chapters I to III of the Guidelines, and no single transfer pricing method is preferred for intra-group services. 

Traditional methods such as the Comparable Uncontrolled Price method, Cost Plus method and Transactional Net Margin Method therefore remain relevant. However, the proposed revisions caution against defaulting automatically to cost-based approaches. 

The draft highlights that more complex arrangements, particularly those involving intangibles, integrated activities or shared risks, may require different approaches. This could include the transactional profit split method or a separation of service returns from intangible-related returns. For taxpayers, the key message is that pricing should follow the accurately delineated transaction, rather than be driven by administrative convenience. 

4. OECD documentation expectations are sharper 

The proposed revisions supplement the existing documentation guidance in Chapter V of the Guidelines. They do not create a formal checklist, but they do place greater emphasis on contemporaneous support for both the benefits test and the pricing analysis. 

Relevant support may include service agreements, communications, approvals, deliverables, allocation calculations, cost base support and evidence showing how the expected benefit was evaluated. Operational and real-time evidence is likely to become increasingly important, particularly where it demonstrates what activities were performed and why they were expected to provide value to the recipient. 

These proposed revisions have attracted significant attention from interested parties because they may expand the practical documentation burden for taxpayers with intercompany services transactions. Groups should consider whether their current processes capture the evidence needed to support service charges before an enquiry arises. 

5. OECD consultation status 

Forvis Mazars submitted comments by 22 July 2026 to the OECD’s public consultation on the proposed revisions to Chapter VII of the OECD Transfer Pricing Guidelines. 

The OECD has announced a follow-up consultation meeting in November 2026 in Paris, where contributors will have the opportunity to discuss their observations with policymakers and other stakeholders. 

What this means for multinational groups 

The proposed revisions reinforce that documentation and audit readiness are increasingly central to supporting intra-group service charges. If the draft revisions are approved in their current form, taxpayers may need to go beyond service agreements and allocation schedules, ensuring that service arrangements are supported by operational evidence such as contemporaneous communications, approvals and deliverables. 

In many cases, these expectations are already reflected in current audit activity and Mutual Agreement Procedure data. As a result, the proposed revisions are less a shift in direction and more a clear signal of where the OECD expects audit scrutiny to intensify. 

For multinational groups, now may be an appropriate time to review existing intra-group service arrangements, test whether the benefit and pricing support remains robust, and identify any gaps in the available evidence. 

Technical note: The foundational principles in Chapters I to III of the OECD Transfer Pricing Guidelines define the arm’s length standard, the transaction-based and profit-based transfer pricing methods, and the process of comparability analysis used to determine an arm’s length range.