Search results
Results from the WOW.Com Content Network
The method of analyzing comparability and what factors are to be considered varies slightly by type of transfer pricing analysis method. The guidelines for CUP include specific functions and risks to be analyzed for each type of transaction (goods, rentals, licensing, financing, and services).
The Transactional Net Margin Method is the most commonly used method to verify the correctness of transfer pricing to make sure that it is not case of transport mispricing. One advantage of this method is that all information necessary for application of this method are freely available from all public and commercial databases. [14]
The Fund Transfer Pricing (FTP) measures the contribution by each source of funding to the overall profitability in a financial institution. [1] Funds that go toward lending products are charged to asset-generating businesses whereas funds generated by deposit and other funding products are credited to liability-generating businesses.
The transactional net margin method (TNMM) in transfer pricing compares the net profit margin of a taxpayer arising from a non-arm's length transaction with the net profit margins realized by arm's length parties from similar transactions; and examines the net profit margin relative to an appropriate base such as costs, sales or assets.
The specific functions and principles followed can vary based on the industry. Management accounting principles in banking are specialized but do have some common fundamental concepts used whether the industry is manufacturing-based or service-oriented. For example, transfer pricing is a concept used in manufacturing but is also applied in banking.
Pricing analysis – microeconomic techniques are used to analyze various pricing decisions including transfer pricing, joint product pricing, price discrimination, price elasticity estimations, and choosing the optimum pricing method. [102] Capital budgeting – investment theory is used to examine a firm's capital purchasing decisions. [103]
He ruled that the comparable uncontrolled price method was the preferred approach to use to establish the arm's length transfer price, subject to adjustment for the issues in dispute. [14] He also ruled that the Part XIII assessments for withholding tax were essentially correct, but subject to a minor pricing adjustment with respect to the drug ...
5. “ Transfer Pricing and International Taxation “ (editor), vol.14 of the United Nations Library on Transnational Corporations, London: Routledge, 1994, 330 p. ; survey-introduction also in “ Transnational Corporations and World Development “, London : International Thomson Business Press, 1996, p. 394-417 6.