HQ charges · 03 Editorial guide
HQ charges & service fees
Banks test substance on HQ charges. A management-fee label is not the file.
First job Separate a genuine service payment from a disguised dividend before the bank pack.
Start here
Key considerations
The first questions are about urgency, governance and preservation — before collection expands or interviews begin.
- What service was actually performed?
- Is there a contract and invoice trail?
- Has this payment been rejected before?
Direct answer
What this page decides
02
A cross-border headquarters charge or service fee should be supported as a real service payment before the bank pack is assembled. Identify the payer, recipient, relationship, service, delivery evidence, pricing method, tax and invoice treatment, contract, approval path and currency flow. Reconcile the commercial substance with accounting entries and the requested remittance. This page organises that record; it does not approve deductibility, transfer pricing, withholding, foreign-exchange processing or bank acceptance.
At a glance
Which fact changes the next route
Use the fact that changes ownership or urgency to decide the next move.
| Question | Why it matters | Next route |
|---|---|---|
| What service was actually received? | A label such as management fee does not establish substance or benefit. | Describe deliverables, personnel, period and business use. |
| How was the charge calculated? | Allocation keys, mark-ups and pass-through costs need a traceable basis. | Reconcile the invoice to the pricing model and underlying costs. |
| Do contract, tax and books align? | Inconsistency can delay bank review and create tax questions. | Cross-check agreement, invoice, filings, ledger and payment request. |
| Is this distinct from a dividend or royalty? | Different payment characterisations follow different evidence and processing routes. | Document why the payment matches the performed service. |
Scope
What this page owns — and what it does not
Practical workflow
Action, evidence, legal gate, output
| Action | Documents / evidence | Legal gate | Output |
|---|---|---|---|
| Map parties and payment | Group chart, registrations, accounts and proposed payment path | Confirm payer, beneficiary and relationship | Entity and funds-flow map |
| Evidence the service | Contract, work product, personnel, time and benefit records | Show delivery to the paying entity | Service evidence index |
| Reconcile the charge | Pricing policy, allocations, cost base, invoice and ledger | Explain method and period consistently | Charge calculation file |
| Assemble payment support | Tax records, approvals, bank forms and prior correspondence | Check current bank and authority requirements | Remittance pack |
Documents
What to gather before the next call
These items help clarify the file; they are not a legal requirement list.
| Item | Why needed | Who holds it | Risk if missing |
|---|---|---|---|
| Intercompany service agreement | Defines service, parties, period and pricing | Payer and recipient | The invoice is unsupported or outside scope |
| Delivery and benefit evidence | Shows commercial substance | Service teams and recipient business | Generic group activity is charged without a recipient link |
| Pricing, tax and payment reconciliation | Connects calculation, books and remittance | Finance, tax and bank teams | Amounts or characterisation differ across documents |
Common failure points
Where files usually break
Using a generic agreement without proof of delivered services.
Applying an allocation key that cannot be reconciled to source costs.
Treating bank processing as proof of tax or transfer-pricing compliance.
Decision map
Keep the question bounded.
- Show the serviceWhat was done, by whom, for whom.
- Show the paperContract, invoice, tax overlay at a high level.
- If rejectedUse the blocked-payment clinic with the bank’s reasons.
Curated resources
Open the asset that matches this job.
Helpful to prepare
Facts that make the next conversation clearer.
These items are orientation aids, not a legal requirement list.
Counsel hand-off
What to bring when you instruct
Bring the group and ownership chart, entity details, intercompany agreement, service description, work product and personnel evidence, pricing policy and calculations, underlying cost records, invoices, ledger entries, tax documents, internal approvals, bank correspondence and proposed funds flow.
Local context
Add the city when the bank’s practice changes.
Onboarding packs and SAFE handling vary by bank and city after the national FX route is identified.
Open city and province guidesCounsel hand-off
Need banking and FX counsel?
This hub organises payment routes and bank packs. It does not move funds, instruct a bank or replace the tax certificate on your facts.
Find banking & FX counselLegal review
Who reviewed this guide
Need qualified counsel?
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Use the portal to identify counsel for this practice and related China-side issues.