OECD public consultation on intra-group services: responses received and key observations
The OECD’s public consultation on the proposed revisions to Chapter VII of the OECD Transfer Pricing Guidelines, focusing on intra-group services, concluded on 22 July 2026.
Comments submitted by professional firms and business organizations indicated broad support for the OECD’s initiative while also highlighting several areas where additional clarification and practical guidance would be beneficial.
Key positive aspects identified by respondents
1. Greater focus on the benefit test
Respondents generally welcomed the OECD’s efforts to strengthen guidance on the “benefit test”, which remains the cornerstone for determining whether an intra-group service has been rendered. They agreed that reinforcing the requirement to demonstrate an economic or commercial benefit for the recipient would improve consistency and help reduce disputes between taxpayers and tax authorities.
2. Additional guidance on allocation keys
There was strong support for the OECD’s intention to expand guidance on allocation keys used to distribute shared service costs. Several respondents recommended practical examples or matrices linking common services (IT, HR, finance, treasury, marketing, logistics, etc.) to appropriate allocation methodologies. Respondents viewed this as an important step towards improving consistency across jurisdictions and reducing the risk of double taxation.
3. Clarification of share-based compensation
Respondents broadly supported the OECD’s decision to address share-based compensation (SBC) within the context of intra-group services. Given the divergent approaches treatment adopted across jurisdictions, additional guidance was widely considered necessary to improve certainty for multinational enterprises and tax administrations.
Main challenges and concerns raised by respondents
1. Distinguishing shareholder activities from intra-group services
One of the most frequently raised issues concerned the continued difficulty of distinguishing non-chargeable shareholder activities from chargeable intra-group services. Respondents noted that modern multinational groups increasingly operate through centralized management structures, making it difficult to separate activities performed in a shareholder capacity from those providing operational benefits to subsidiaries. Particular challenges were identified for family-owned businesses and small and medium-sized enterprises (SMEs), where ownership and management functions are often closely intertwined.
2. Need for more practical examples
Respondents emphasized that many transfer pricing disputes arise not because of disagreement over the underlying principles, but because of uncertainty in applying them to specific situations. Additional practical examples were requested, particularly in relation to mixed-purpose activities, stewardship functions, incidental benefits, and situations where services provide both shareholder and operational benefits.
3. Inconsistent approaches to allocation keys
Many respondents highlighted the lack of objective criteria for selecting allocation keys and noted that methodologies accepted in one jurisdiction may be challenged in another. Suggestions included greater recognition of sector-specific allocation methods, regional allocation bases, and even volume-based metrics where they better reflect expected benefits.
4. Uncertainty regarding share-based compensation
Although respondents welcomed the OECD’s focus on SBC, they also highlighted numerous unresolved issues, including the timing of recognition, valuation methods, the treatment of recharge arrangements, whether SBC should form part of the cost base for cost-based transfer pricing methods, and whether mark-ups should apply.
Overall conclusion
The consultation responses demonstrate broad support for the OECD’s objective of modernizing Chapter VII and enhancing certainty in the transfer pricing treatment of intra-group services. The areas most frequently identified for further clarification were:
- the application of the benefit test;
- the distinction between shareholder activities, stewardship activities, and intra-group services;
- the selection and documentation of allocation keys;
- the transfer pricing treatment of share-based compensation; and
- the use of practical examples to improve consistency across jurisdictions.
The comments received during the consultation are expected to be discussed at the OECD Public Consultation on the Revision of Chapter VII of the OECD Transfer Pricing Guidelines (Special Considerations for Intra-Group Services), scheduled for November 2026. The discussion will help inform the OECD’s further work on finalizing the revised guidance.
Diana Vlad is the Transfer Pricing Manager at PKF Finconta. She graduated from the Faculty of Mathematics and Informatics, University of Bucharest, in 2007 and the Faculty of Economics and Business Administration, “Nicolae Titulescu” University of Bucharest, in 2021, as well as a Master in Applied Sciences, from Politehnica University of Bucharest.
