A transaction that takes place within the same legal structure of the company. In other words, it refers to any sale, transfer or trade between a division, subsidiary, parent or affiliated or related company under the common ownership and control of a corporate entity. Such a transaction is initiated and completed within a company, such as between departments, business units or branches of the same legal entity. It may also take place between two groups within one legal entity.
If multiple subsidiaries belong to the same legal entity, transactions and activities (e.g., transfers) between them are recorded as intra-company transactions.
For example, intra-company subsidy transfers may occur by means of mispriced intra-company loans or asset purchases, dividend payments, and equity investments made at less than a market rate of return. In each case, certain regulations impose restrictions that tend to limit the opportunity for intra-company subsidy transfer.
An example of an intra-company transaction is a supplier selling to a retailer which is also controlled by the same group.
Intra-company shall not to be confused with “inter-company transaction” – a transaction between affiliates in a company group.
