OECD COVID-19 TPG paragraph 29

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As with other analyses under the OECD TPG, numerous considerations may come into play, including the availability and choice of potential transfer pricing methods and comparables, and the interrelationship among them and the parameters of the testing periods (e.g. a transaction-based method may have a different time frame from a profit-based method). Just as it may improve reliability to use separate or more carefully circumscribed testing periods (or price setting periods) in some fact patterns (see paragraph 27), in other fact patterns the use of combined periods (that include both years that are impacted by the pandemic and years that are not impacted) may improve reliability.14 This approach would aggregate the financial results of FY2020, which may be exceptional, with the more normal results of prior years in order to test the arm’s length nature of the transfer pricing policy applied in FY2020.


14 Paragraphs 3.75 and 3.79 of Chapter III of the OECD TPG.

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