A further strength of the transactional profit split method is that all relevant parties to the transaction are directly evaluated as part of the pricing of the transaction, that is, the contributions of each party to the transaction are specifically identified and their relative values measured in order to determine an arm’s length compensation for each party in relation to the transaction.
TPG2018 Chapter II paragraph 2.122
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By OECD
Category: OECD Transfer Pricing Guidelines (2017) | Tag: Contribution analysis, Methods - strength and weaknesses, Profit split method (PSM), Relative value of contributions, Transfer pricing methods, Two-sided method
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