Management fees & service charges: proving benefit, selecting methods, documenting markups

Intercompany charges are a frequent focus in reviews for foreign-owned entities in Russia. This guide covers management fees and service charges with a practical focus on benefit evidence, method selection, and markup documentation. Contract wording matters, but review conclusions often depend on whether invoices, acceptance confirmation (acceptance note), and working papers connect to deliverables used by the Russian entity.

What reviewers test

Services rendered: scope, timing, providing entity (within the group), deliverables.
Business benefit: how outputs are used in the Russian entity’s processes.
Pricing rationale: method, cost base rules, allocation key, markup working paper.

Evidence set to keep monthly

Store documents so each invoice line can be traced to work performed:

scope and deliverables catalogue (scope, frequency, deliverables, exclusions)
delivery evidence (tickets, emails, meeting notes, reports, access logs, training materials)
acceptance confirmation (acceptance note) signed by the Russian entity (monthly or quarterly)
allocation workbook with source reports (users, headcount, transactions)
pricing memo (method selection, cost base boundaries, markup working paper)

Method and markup: how to support the choice

A method should match how charges are calculated and recorded:

Direct charge: identifiable deliverables and timestamps
Cost-based charge: costs accumulated and allocated by consumption
Bundled model: one package of work maintained through one monthly routine

For markups, keep a short working paper with: data sources used, filters, range obtained, and the selected point linked to functions performed and risks assumed by the provider.

Scope boundary: what not to include

Charges should exclude activities that do not serve the Russian entity’s operations (for example, shareholder activities). This boundary is easier to support when written into the scope and deliverables catalogue and reflected in cost base rules.

Practical table: what to store each month

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The invoice is the final step. The evidence file starts with the scope and deliverables catalogue and is updated monthly with deliverables and allocation inputs.

Julia Vernikovskaya, Financial Director, Outsourcing Solutions

How we support clients in Russia

Outsourcing Solutions provides transfer pricing services, accounting and tax compliance, payroll, HR administration, company formation, and bank account support in Russia. For intercompany charges, support often includes a document pack review, a gap list, and a month-end routine aligned to transfer pricing working papers.

To begin, please share: the intercompany agreement for management fees and charges, the last 3 invoices, one acceptance confirmation template (acceptance note), and the allocation key inputs used (users/headcount/transactions).

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