Methods & benchmarking
Safe Harbour
A safe harbour is a set of simplified transfer pricing rules that allow qualifying taxpayers to apply a predetermined pricing outcome, such as a fixed markup or margin, without needing a full benchmarking study. Safe harbours are typically offered for low-value adding intercompany services, small transactions or low-risk.
Safe harbours are designed by tax authorities to reduce compliance costs for routine, lower risk intercompany transactions where the cost of a full benchmarking analysis would outweigh the tax revenue at stake. A common example is the OECD's simplified approach for low value adding intra group services, which permits a fixed.
Electing into a safe harbour typically means accepting the predetermined outcome even if a bespoke analysis might have produced a different result, in exchange for reduced documentation burden and lower audit risk from the electing tax authority. However, safe harbours are usually optional, jurisdiction specific and subject to.
In practice
What matters when applying safe harbour
- Offers simplified, predetermined pricing for qualifying transactions
- Commonly used for low value adding intercompany services
- Reduces the need for a full comparable benchmarking study
- Usually optional and subject to eligibility thresholds
- Not always recognised consistently across jurisdictions
Frequently asked
Common questions
What types of transactions typically qualify for a safe harbour?+
Common candidates include low value adding intra group services such as administrative or IT support, small intercompany loans below a set threshold, and low-risk distribution or manufacturing arrangements.
Are safe harbour outcomes accepted by all tax authorities involved in a transaction?+
Not necessarily. A safe harbour is generally a unilateral simplification offered by one tax authority and does not guarantee that the counterparty jurisdiction will accept the same markup or treatment, which can create a risk of double taxation if the two administrations disagree.
See how the tooling handles this in practice
Our transfer pricing tools calculate intercompany charges, benchmark financing and reconcile the intercompany ledger from your own data. Book a short walkthrough and we will show the workflow on a scenario that matches your group structure, rather than a generic demo dataset.