For multinational groups relying on cost-plus 5% headquarters services pricing, the landscape is shifting. The OECD’s Consultation Paper on Chapter VII of the Transfer Pricing Guidelines makes clear that a uniform Cost-Plus 5% mark-up is no longer the default approach, and tax authorities are paying close attention.

Historically, many multinationals grouped a broad range of headquarter activities ranging from HR and payroll to strategic leadership and brand management, into a single “routine services” category and applied one standard mark-up. The revised OECD framework challenges this practice directly, requiring that pricing reflect the actual nature and value of each service, not simply its cost.

This session examined what the proposed revisions to Chapter VII mean in practice for organizations that currently rely on cost-plus 5% headquarters services arrangements, and how to transition to a more defensible, value-based pricing model.