Intercompany Cost Sharing Agreement Template for Australia

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Key Requirements PROMPT example:

Intercompany Cost Sharing Agreement

"I need an Intercompany Cost Sharing Agreement for our Australian mining group with five subsidiaries, focusing on shared IT infrastructure and corporate services, with specific provisions for equipment and personnel sharing between sites."

Document background
The Intercompany Cost Sharing Agreement is essential for Australian corporate groups seeking to establish a formal framework for sharing costs between related entities. This document becomes necessary when multiple group entities share resources, services, or facilities and need to allocate costs in a tax-efficient and compliant manner. It addresses key requirements under Australian tax law, including transfer pricing regulations, GST considerations, and corporate governance obligations under the Corporations Act 2001. The agreement is particularly important for demonstrating to the Australian Taxation Office that intercompany arrangements are conducted at arm's length and are properly documented. It includes comprehensive details on cost identification, allocation methodologies, and administrative procedures to ensure consistent application and compliance across the group.
Suggested Sections

1. Parties: Identifies the participating group entities and their relationships

2. Background: Sets out the context, purpose, and business rationale for the cost sharing arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Scope of Agreement: Outlines the activities and costs covered by the arrangement

5. Cost Pool: Defines what costs are included and excluded from the sharing arrangement

6. Allocation Methodology: Details the basis and methods for allocating costs between participants

7. Payment Terms: Specifies timing, currency, and method of payments between parties

8. Accounting and Documentation: Sets out record-keeping requirements and accounting procedures

9. Governance: Establishes oversight mechanisms and decision-making processes

10. Tax Compliance: Addresses transfer pricing and other tax compliance requirements

11. Term and Termination: Specifies duration, renewal, and termination provisions

12. General Provisions: Includes standard legal clauses such as amendments, notices, and governing law

Optional Sections

1. Intellectual Property Rights: Required when the cost sharing involves development or use of intellectual property

2. Employee Secondment: Include when staff are shared between entities as part of the arrangement

3. Service Level Requirements: Needed when specific performance standards must be maintained

4. Budget and Forecasting: Include when formal budgeting processes need to be established

5. Audit Rights: Add when parties require specific audit capabilities beyond standard accounting provisions

6. Insurance Requirements: Include when shared activities require specific insurance coverage

7. Confidentiality: Add detailed confidentiality provisions when sharing sensitive information

8. Change Control: Include when formal processes for changing allocation methods or scope are needed

Suggested Schedules

1. Schedule 1 - Allocation Keys: Detailed breakdown of allocation factors and calculations

2. Schedule 2 - Excluded Costs: Comprehensive list of costs specifically excluded from the arrangement

3. Schedule 3 - Markup Calculations: Details of any markup applications for tax compliance

4. Schedule 4 - Participating Entities: Complete list of participating entities and their details

5. Schedule 5 - Service Categories: Detailed description of services covered by the agreement

6. Appendix A - Cost Allocation Examples: Practical examples of how costs will be allocated

7. Appendix B - Reporting Templates: Standard templates for regular reporting and reconciliation

8. Appendix C - Transfer Pricing Documentation: Required documentation for transfer pricing compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Manufacturing

Technology

Professional Services

Healthcare

Mining and Resources

Retail

Telecommunications

Construction

Energy

Relevant Teams

Finance

Legal

Tax

Treasury

Compliance

Shared Services

Corporate Governance

Accounting

Risk Management

Internal Audit

Relevant Roles

Chief Financial Officer

Tax Director

Finance Manager

Legal Counsel

Corporate Controller

Transfer Pricing Manager

Group Financial Controller

Compliance Officer

Treasury Manager

Head of Shared Services

Financial Planning Analyst

Group Accountant

Corporate Secretary

Risk Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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