Intercompany Trade Agreement - Transfer Pricing Rules (tcitr1105m000)

Use this session to specify the price origins, priorities and markup or markdown percentages or amounts for an intercompany trade scenario of an intercompany trade agreement. This determines the amount of the internal invoice.

Note:

For intercompany trade scenarios Subcontracting Depot Repair and Internal Service Delivery, you must define one or moresubscenarios.

Field Information

Intercompany Trade Agreement

intercompany trade agreement

Scenario

intercompany trade scenario

Price Origin

The pricing that must be used for the internal invoice of the selected intercompany trade scenario.

Allowed values

Cost-Plus

The internal trade price equals the actual costs, optionally a markup can be added.

Freight costs are based on the estimated freight cost, which, depending on the applicable invoicing method, can be updated with the carrier invoice. For more information, refer to Invoicing methods.

Time and Material

The internal price for the repair depends on the actuals, that is, on the material used, the hours spent, and the actual other costs.

Commercial Price

The internal trade prices and the prices charged to a non-affiliated business partner are the same, and can be retrieved from the applicable price books.

For repairs, a fixed internal price is specified. This price is independent of the type of repair and the actual costs.

See also Intercompany trade scenario Labor and Intercompany trade scenario Expenses.

Sales Order Price (Gross)

The internal trade price equals the gross sales price charged to the external business partner, minus the percentage specified in the Markdown Percentage field.

Sales Order Price (Net)

The internal trade price equals the net sales price charged to the external business partner, minus the percentage specified in the Markdown Percentage field.

Purchase Order Price (Gross)

The internal trade price equals the gross purchase order price, plus the percentage specified in the Markup Percentage field.

Purchase Order Price (Net)

The internal trade price equals the net purchase order price, plus the percentage specified in the Markup Percentage field.

Sales Order Customs Value

The customs value, minus the percentage specified in the Markdown Percentage field.

Profit Split (Gross)

The gross profit of the external sales transaction is divided among the entities involved in the transaction according to the percentage specified for the intercompany trade order in the Profit Split Percentage field. See Profit split.

Profit Split (Net)

The net profit of the external sales transaction is divided among the entities involved in the transaction according to the percentage specified for the intercompany trade order in the Profit Split Percentage field. See Profit split.

Zero Price

The value 0 (zero) is used for an internal invoice, because the costs are considered to be part of another invoice line, for example, the surcharge for labor or material.

This pricing option is only available if the intercompany trade scenario is Subcontracting Depot Repair or Expenses.

Note: The available price origins depend on the selected intercompany trade scenario. For more information, refer to chapter Intercompany Trade Scenarios in the LN User Guide for Intercompany Trade.

Priority

The priority of the price origin for the selected trade scenario. If no pricing information is found for the price origin of the highest priority, LN searches the price origin of the next priority for pricing information.

Markdown Percentage

The percentage by which the internal invoice is reduced. For example, if the sales price for the customer is EUR 100 and the markdown percentage is 5%, the internal invoice amount is EUR 95.

Only applicable to:

Sales Order Price (Gross)
Sales Order Price (Net)
Sales Order Customs Value

Markup Percentage

The percentage by which the internal invoice is increased.

Only applicable to:

Cost-Plus
Purchase Order Price (Gross)
Purchase Order Price (Net)

Markup Amount

The amount by which the internal invoice is increased.

This is only applicable to the Freight scenario and the Cost-Plus price origin.

Currency

The currency of the markup amount.

Profit Split Percentage

The profit percentage of the external sales order, contract deliverable, or service order that the selling entity of the intercompany trade relationship is to receive. The remaining percentage goes to the buying entity.