Are your intra-group service structures ready for the 2026 OECD revisions?

A fundamental shift is underway. On June 1^st, The Organisation for Economic Co-operation and Development (OECD) published the Public Consultation document, signalling a further global move away from formalistic paperwork and toward deep operational reality.

What stays the same: the Low Value-Adding (LVA) safe harbor

The core mechanics for routine backend operations remain the same. The 2026 draft preserves the existing simplified approach for LVA intra-group services:

• 5% profit mark-up: qualifying supportive services (e.g. accounting, HR, routine IT support) can still utilize the standard 5% mark-up without requiring a full-fledged benchmarking study.
• Core exclusions: core business functions, R&D, manufacturing, and strategic sales/marketing remain strictly excluded from this simplified regime.

What is Changing: the end of presumptions

For complex, centralized, or high value-adding services, the proposed revisions introduce strict new audit standards:

• Substance over form/contracts: tax authorities are explicitly instructed that standard intercompany agreements, invoices, or descriptions (such as “management fees”) are no longer sufficient evidence that a service was actually rendered. Auditors will look past the paperwork to evaluate real-time operational interaction.
• Elimination of the “One-sided” shortcut: There is no longer a presumption that a service provider can automatically be treated as a routine “tested party” using one-sided cost methods.
• Scrutiny on intermediary & pass-through costs: If a central entity acts as an intermediary or paying agent (e.g. booking global media space or third-party software licenses), it should pass those expense blocks through at 0% mark-up. Mark-ups may only be applied to the entity’s actual internal coordination costs.
• Shift to profit splits: If your centralized service hubs utilize proprietary software, unique databases, or share integrated risks, tax authorities will increasingly mandate the Transactional Profit Split Method instead of standard Cost-Plus models.

Action plan

If the new guidelines will pass the public check, cross-border businesses should transition from a compliance-first mindset to an operational-first reality:

1. Map centralized hubs: evaluate if your shared service centers create or leverage unique intangible property. If they do, your current cost-plus model is exposed to audit risk.
2. Isolate pass-through blocks: audit your global procurement and marketing hubs to ensure third-party expenses are strictly passed through without a mark-up where no direct value is added.
3. Build an operational paper trail: support the “benefit test” with operational records, including project deliverables, communication logs, and internal presentations (i.e. not just a year-end contract).

Next steps to secure your transfer pricing policy architecture

The window for public comment on these revisions closes on 22 July 2026, ahead of the official OECD public consultation in Paris in November. While these updates are at the draft stage, they serve as the precise blueprint for how international tax auditors are evaluating corporate structures right now.

If you want to align your corporate structure with these evolving standards, then contact Walid Sediq (wsediq@crop.nl).