Transfer Pricing of Intangible Assets and R&D Services in Service Level Agreement

All transactions in multinational enterprises which are realized among group members are very sensitive to tax risks. The more often the transactions are connected to intangible assets or R&D services the more tax risks they generate. This article identifies theoretical and practical problems of services level agreements (SLA) in financial management. The author offers step-solutions for utility measurement by service provider and service receiver, cost allocations and deals with suitable profit level indicators. The goal of this article is to provide sufficient analysis of arm’s length principle in SLAs with respect to the OECD Transfer pricing for MNEs Guidelines and with respect to other significant regulations.