Most captive GCCs bill their parent their total costs plus an agreed markup. That markup must be at an arm's-length level, because it is the GCC's only revenue and a standing transfer pricing audit target.
Key points
- Put a services agreement in place before the first invoice.
- Invoice monthly and reconcile the cost base to the books.
- A transfer pricing study and accountant's report support the markup each year.
General information, not tax or legal advice. Rules change; confirm the position for your entity before acting.