Parent company pays a phone bill or large marketing invoice addressed to a subsidiary. This is a one off and there is no other way around it.
There is a transfer pricing policy in place on some shares services such as accounting, purchasing.
My understanding of main intercompany services are as below.. 1 & 2 has TP applied, 3 has interest rate. My question is on 4.
1. Physical product sales/ purchases 2. Shared services
3. Loan agreement
4. One-off ad-hoc payment of bills addressed to other company
I would consider this as a non shared service item and wouldn't apply a markup when invoicing the subsidiary. Is that the correct treatment ? And would VAT be applied to the invoice given the subsidiary is VAT registered?
Both companies are in the UK.