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Indirect Rate Agreement Template for New Zealand

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Key Requirements PROMPT example:

Indirect Rate Agreement

"I need an Indirect Rate Agreement between our New Zealand parent company and its three subsidiaries, establishing a standardized methodology for allocating shared service costs starting from January 2025, with specific focus on IT and administrative services."

Document background
The Indirect Rate Agreement serves as a crucial document for organizations operating in New Zealand that need to establish a formal framework for allocating indirect costs across various activities, projects, or entities. This agreement is particularly important when organizations need to demonstrate transparent and consistent cost allocation methodologies to stakeholders, auditors, and regulatory authorities. It outlines the approved methods for calculating indirect rates, defines cost pools and allocation bases, and establishes procedures for periodic adjustments and true-ups. The agreement ensures compliance with New Zealand's regulatory requirements, including the Contract and Commercial Law Act 2017, tax legislation, and applicable accounting standards. It is commonly used in government contracting, inter-company arrangements, and situations requiring formal cost recovery mechanisms.
Suggested Sections

1. Parties: Identifies and defines the contracting parties - typically the service provider and recipient

2. Background: Explains the context and purpose of the agreement, including the business relationship between parties

3. Definitions: Defines key terms used throughout the agreement, including technical accounting and cost allocation terminology

4. Term and Renewal: Specifies the duration of the agreement and renewal provisions

5. Indirect Rate Calculation Methodology: Details the approved methodology for calculating indirect rates, including cost pools and allocation bases

6. Cost Categories and Classifications: Defines and categorizes direct and indirect costs, including excluded costs

7. Rate Application and Billing: Specifies how and when indirect rates will be applied and billed

8. True-up and Adjustments: Outlines the process for periodic rate adjustments and true-up calculations

9. Record Keeping and Audit Rights: Specifies documentation requirements and audit provisions

10. Confidentiality: Establishes confidentiality obligations regarding rate information and calculations

11. Dispute Resolution: Outlines the process for resolving disagreements about rates or calculations

12. General Provisions: Standard contractual provisions including governing law, amendments, and notices

Optional Sections

1. Compliance with Specific Industry Regulations: Include when the agreement must comply with specific industry regulatory requirements

2. International Considerations: Include when dealing with international entities or cross-border transactions

3. Related Party Provisions: Include when the agreement is between related entities requiring transfer pricing considerations

4. Force Majeure: Include when specific provisions for handling unforeseen circumstances affecting rate calculations are needed

5. Intellectual Property: Include when proprietary systems or methods are used in rate calculations

6. Insurance Requirements: Include when specific insurance coverage related to service provision is required

Suggested Schedules

1. Schedule A - Cost Pools: Detailed listing and description of all indirect cost pools

2. Schedule B - Allocation Bases: Detailed description of allocation bases for each cost pool

3. Schedule C - Rate Calculation Examples: Step-by-step examples of rate calculations

4. Schedule D - Excluded Costs: Comprehensive list of costs excluded from indirect rate calculations

5. Schedule E - True-up Methodology: Detailed procedures for conducting true-up calculations

6. Appendix 1 - Reporting Templates: Standard templates for rate reporting and calculations

7. Appendix 2 - Key Personnel: List of key personnel responsible for rate administration

8. Appendix 3 - Compliance Certificates: Required compliance and certification forms

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions








































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Relevant Industries

Professional Services

Manufacturing

Engineering

Construction

Government Contracting

Defense

Research and Development

Information Technology

Healthcare

Education

Relevant Teams

Finance

Legal

Operations

Commercial

Procurement

Compliance

Tax

Internal Audit

Project Management Office

Business Development

Cost Control

Relevant Roles

Chief Financial Officer

Financial Controller

Cost Accounting Manager

Finance Director

Contract Manager

Commercial Director

Project Manager

Operations Director

Pricing Manager

Compliance Officer

Tax Manager

Legal Counsel

Procurement Manager

Business Unit Director

Financial Analyst

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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