Transfer pricing studies11/18/2023 ![]() Determination of and making comparability adjustments where appropriate.Identification of potential comparables.Selection of the most appropriate transfer pricing method and, depending on the method, determination of the relevant financial indicator.Determination of available sources of information on external comparables where such external comparables are needed taking into account their relative reliability.Review of existing internal comparables, if any.Review the controlled transaction(s) under examination, in order to choose the tested party (where needed).Broad-based analysis of the taxpayer’s circumstances.the uncontrolled transactions that are regarded as potentially comparable.īelow is a description of a typical process that can be followed when performing a comparability analysis (benchmarking study):.the controlled transaction under review.How to perform a Transfer Pricing benchmarking studyĪ comparison implies examining two terms: ![]() ![]() Benchmarking study or comparability analysis is the heart of the application of the arm’s length principle.Īpplication of the arm’s length principle is based on a comparison of the conditions in a controlled transaction with the conditions that would be applied between independent parties and undertaking a comparable transaction under comparable circumstances.īenchmarking study or comparability analysis is the process of identification of an arm’s length ranges (market level) of prices/margin in order to compare the prices/margin in the controlled transaction with such range.
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