Group inter-entity services agreement (with PPSR security)
Document your group's inter-entity arrangements and protect your tax deductions.
Many business groups share staff, assets or services between related entities without having the right documentation in place. Failing to maintain current, properly documented inter-entity service agreements can put your tax deductions at risk. If the arrangement is not documented correctly, the ATO can disallow the deduction entirely. For groups with significant inter-entity flows, that exposure can be substantial.
What is an inter-entity services agreement and why does it matter?
An inter-entity services agreement is a formal contract between related entities in a business group, typically between a holding company and an operating entity, or between two operating entities. The contract documents the provision of shared services, staff, or resources from one to the other.
Why do inter-entity service agreements matter for tax purposes?
Under the Income Tax Assessment Act 1997 (Cth) (the Act), a business can only claim a deduction for a payment if it is incurred in gaining or producing assessable income. For inter-entity payments to be deductible, there must be clear evidence of a genuine commercial arrangement, including a current agreement that documents the mutual obligations and the basis for the payment.
What happens if our inter-entity agreement has expired?
What is the PPSR and why is it relevant to inter-entity arrangements?
How often should inter-entity agreements be reviewed?
Protect your deductions
Register your security
Reduce ATO risk
Don't let outdated documents put your tax deductions at risk.
An expired inter-entity agreement is not an administrative detail. It can cost you the deduction.
Most business groups establish inter-entity service arrangements early and then allow the documentation to drift. Agreements expire, payment amounts change without being updated in the documents, and the actual arrangement no longer matches the written record. This creates real legal and tax risk. Without current documentation that demonstrates genuine mutual obligations and a proper commercial arrangement, the ATO can disallow deductions. Leaving the group exposed to double taxation, penalties and interest.
- We will review your existing inter-entity service arrangements and documentation.
- We will draft updated service agreements between related entities.
- We will advise on the commercial terms required to support tax deductibility.
- We will advise on and register PPSR security interests where appropriate.
- We will recommend a review schedule to ensure documentation remains current.
Your accountant raises a concern
Your accountant or a tax adviser has flagged that your inter-entity service agreements are out of date, inconsistent with the amounts actually paid, or have expired altogether. They are concerned that the ATO could challenge your deduction claims for inter-entity payments.
You need to act before the gap becomes a formal problem.
What's included in your inter-entity services agreement service
- Review of existing inter-entity arrangements and documentation.
- Inter-entity service agreement drafting or updating.
- PPSR security interest advice and registration.
- Tax compliance documentation guidance.
- Ongoing review schedule recommendation.
An expired inter-entity agreement is not just a paperwork problem.
Inter-entity service arrangements often start with a properly drafted agreement and then drift. The agreement expires and no one renews it. Payment amounts increase without being reflected in the documents. The services provided change over time without any amendment to the written record. Meanwhile, the payments continue to be deducted against income.
When the ATO asks questions about those deductions, an expired or inconsistent agreement is not a minor gap. A recent Full Federal Court decision has confirmed that it can mean the difference between a valid deduction and no deduction at all.
From outdated documents to a properly documented group structure
We will review your current inter-entity arrangements and identify exactly where the documentation falls short. We will then prepare updated service agreements that accurately reflect the commercial arrangement, support the deductibility of inter-entity payments, and demonstrate genuine mutual obligations between the parties. Where the group structure means that one entity is providing services on credit to another, we will also advise on the registration of security interests on the PPSR to protect the provider’s position if the other entity becomes insolvent.
From outdated documents to a properly structured group arrangement.
Review and assess
We review your current inter-entity arrangements and documentation to identify what needs to be updated.
Draft and register
We prepare updated service agreements and register PPSR security interests where required.
Implement and maintain
We recommend a compliance review framework to keep your documentation current.
Commercial and tax lawyers experienced in structuring and documenting inter-entity arrangements for business groups.
We know that keeping group documentation current is rarely the first priority when you are focused on running the business. ADLV Law has helped many business groups identify and address documentation gaps before they become ATO problems. We take a practical approach that balances legal compliance with commercial workability.
We understand you want to know the cost, before we get started.
We will map out our process, from beginning to end, so you know what the journey will look like before you get started.
We will provide you with a clear and detailed Work Proposal covering each step along the way.
Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.
Our great lawyer guarantee
We want to be part of your team over the long term. We achieve this by adhering to these core principles:
Take the time
We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.
Share our knowledge
We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.
Stick to our knitting
We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.
Work as one team
Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.
Fair pricing
For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.
It's your show
We're not in this for our egos. We're in it for a front row seat to witness your success.
