Intercompany Agreement Template for South Africa

A Intercompany Agreement sets out the terms and rules when different companies within the same group do business together. In South Africa, these contracts play a vital role in managing transfer pricing compliance under the Income Tax Act and help companies prove their transactions are truly arm's length.

Think of it as the rulebook for how related companies share resources, provide services, or transfer goods between each other. It covers key details like pricing methods, payment terms, and service levels while meeting South African Revenue Service requirements. This documentation becomes especially important during tax audits and helps protect both local subsidiaries and multinational groups operating in the region.

Put an Intercompany Agreement in place before your group companies start doing business with each other. This is especially crucial when setting up new subsidiaries in South Africa or restructuring existing operations. The South African Revenue Service requires clear documentation of related-party transactions, making these agreements essential from day one.

Create these agreements when sharing staff, facilities, intellectual property, or providing management services between group entities. They're particularly important during expansion, when introducing new products, or establishing shared service centers. Having them ready helps avoid tax disputes, protects both parties' interests, and ensures smooth business operations across your corporate group.

• Intercompany Agreement For Services: Governs general service provision between group companies, covering consulting, administrative, or technical support
• Intercompany Asset Transfer Agreement: Manages the sale or transfer of physical assets, equipment, or property between related entities
• Intercompany Employee Transfer Agreement: Regulates staff secondments and permanent transfers between group companies
• Intercompany Recharge Agreement: Handles cost allocation and expense sharing between group entities
• Intercompany Shared Services Agreement: Coordinates centralized support functions like HR, IT, or accounting across the group

• Group Companies: Both parent companies and subsidiaries operating in South Africa who need to formalize their internal business relationships
• Corporate Legal Teams: Draft and review Intercompany Agreements to ensure compliance with local transfer pricing rules and company law
• Financial Directors: Oversee pricing structures and payment terms between related entities while maintaining tax efficiency
• Tax Practitioners: Advise on SARS compliance and help structure agreements to meet arm's length requirements
• Company Directors: Sign and implement these agreements as part of their fiduciary duties under the Companies Act

• Company Details: Gather registration numbers, addresses, and director information for all group entities involved
• Service Scope: Define exactly what services, assets, or resources will be shared between the companies
• Pricing Strategy: Document your transfer pricing methodology to satisfy SARS requirements and arm's length principles
• Performance Metrics: Outline service levels, delivery timeframes, and quality standards expected from each party
• Payment Terms: Specify currencies, payment schedules, and invoicing procedures between entities
• Compliance Check: Our platform ensures your agreement meets South African legal requirements while remaining clear and enforceable

• Party Details: Full legal names, registration numbers, and registered addresses of all group companies
• Service Description: Detailed scope of services, deliverables, and performance standards
• Pricing Terms: Clear transfer pricing methodology compliant with SARS guidelines
• Duration & Termination: Agreement period, renewal terms, and exit procedures
• Confidentiality: Protection of sensitive business information and trade secrets
• Dispute Resolution: South African jurisdiction and arbitration procedures
• POPIA Compliance: Data protection measures for personal information handling
• Signatures: Authorized signatories' details and execution requirements

Intercompany Agreements are often confused with Business Acquisition Agreements, but they serve distinctly different purposes in South African corporate law. While both involve transactions between companies, their scope and application differ significantly.

• Purpose: Intercompany Agreements manage ongoing relationships between related companies within the same group, while Business Acquisition Agreements facilitate one-time purchases of entire businesses between independent parties
• Pricing Approach: Intercompany Agreements must demonstrate arm's length pricing for SARS compliance, whereas Business Acquisition Agreements reflect market-negotiated values
• Duration: Intercompany Agreements typically operate continuously with periodic reviews, while Business Acquisition Agreements conclude once the transaction is complete
• Regulatory Focus: Intercompany Agreements emphasize transfer pricing and group tax compliance, while Business Acquisition Agreements focus on competition law and shareholder approvals