Where the reseller is clearly carrying on a substantial commercial activity in addition to the resale activity itself, then a reasonably substantial resale price margin might be expected. If the reseller in its activities employs certain assets (e.g. intangibles used by the reseller, such as its marketing organisation), it may be inappropriate to evaluate the arm’s length conditions in the controlled transaction using an unadjusted resale price margin derived from uncontrolled transactions in which the uncontrolled reseller does not employ similar assets. If the reseller possesses valuable marketing intangibles, the resale price margin in the uncontrolled transaction may underestimate the profit to which the reseller in the controlled transaction is entitled, unless the comparable uncontrolled transaction involves the same reseller or a reseller with similarly valuable marketing intangibles.
TPG2017 Chapter II paragraph 2.38
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By OECD
Category: OECD Transfer Pricing Guidelines (2017) | Tag: Intangibles used by the reseller, Marketing intangibles, Resale price method (RPM), Size of gross margin, Substantial commercial activity, Traditional transaction methods, Transfer pricing methods
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