Your feedback is important to us!
We are dedicated to improving our service. Please take a moment to give us your opinion.

Thank you for your time!
Article successfully added.
Toll Manufacturing Agreement (intra-group)

Toll Manufacturing Agreement (intra-group)

PricewaterhouseCoopers AG

Date: October 04, 2017
The United States Dollar price shown here is for reference only. Click here for more information.

Author's Note

The Toll Manufacturing Agreement is a Swiss-law governed standard toll manufacturing agreement... Read more

The Toll Manufacturing Agreement is a Swiss-law governed standard toll manufacturing agreement for use on an intra-group basis.

In a toll manufacturing arrangement, the principal is usually responsible for procuring and providing to the manufacturer all materials necessary for manufacture of the products. Conversely, in a contract manufacturing arrangement, the manufacturer is responsible for procuring the required materials.

Under the Toll Manufacturing Agreement, the manufacturer is compensated on the basis of recovery of the fully-loaded costs of manufacture, plus a margin (user defined). The agreement assumes that as between the parties, the principal owns all intellectual property rights relating to the products and the manufacturing process.  

The template includes, as standard, an allocation of risks between the parties that is consistent with that found in a typical toll manufacturing relationship, as well as an obligation on the principal to indemnify the manufacturer for any loss or damage arising out of the performance of the manufacturing activities.

Terms which are configurable to the user’s needs include:

  • Purpose and background;
  • Term and termination;
  • The products to be manufactured and any specific requirements applicable to the manufacturing process;
  • Budgeting, payment and reconciliation mechanisms;
  • Territory;
  • Terms relating to delivery of products;
  • Termination assistance;
  • Sub-contracting and assignment rights;
  • Provisions relating to notices;
  • Dispute resolution, jurisdiction and arbitration; and
  • Other boiler-plate provisions (e.g. confidentiality, force majeure). 


Circumstances of Use

This document is intended to be used to document the provision of toll manufacturing services between group companies, for transfer pricing purposes.

The Toll Manufacturing Agreement may be used for cross-border transactions where the parties have agreed to use Swiss law. 

Terms of Use

The purchase of this Product is subject to PartnerVine Terms.

You (the registered user through whose account the purchase is made) may:

  • Access the document-generation interview for 90 days from date of purchase;
  • Export and download an unlimited number of copies of the document(s) in Word or pdf format;
  • Share and use the document copies in connection with the circumstances described in this Author’s Note and only for the ordinary business purposes of the group of companies to which you belong.


 Exclusions and Limitations

The Toll Manufacturing Agreement assumes that the allocation of risk between the parties is aligned with that in a typical toll manufacturing relationship, and that the manufacturer is compensated accordingly. 

The key differences between a toll manufacturing relationship and a contract manufacturing relationship lie in the assumption of risks and responsibility for procuring raw materials. A Contract Manufacturing Agreement template is also available.

Other Comments

No warranty or representation is given or made that the allocation of functions and risk and the related transfer pricing arrangements provided for in this document are appropriate in the specific circumstances of any given group of companies. No legal or tax advice is provided and nothing in this template or the related user interview shall be deemed to constitute the provision of legal or tax advice in relation to any fact or matter. Where necessary, specialist legal and tax advice should be sought together with input from group accounting functions prior to executing this agreement.