Tag: Exercise of good judgment

TPG2022 Chapter III paragraph 3.81

/ Comparability analysis, Compliance issues, Documentation, Exercise of good judgment, OECD Transfer Pricing Guidelines (2022), TPG2022 Chapter III: Comparability Analysis
When undertaking a comparability analysis, there is no requirement for an exhaustive search of all possible relevant sources of information. Taxpayers and tax administrations should exercise judgment to determine whether particular comparables are reliable ... Read more

TPG2022 Chapter II paragraph 2.74

/ Availability of reliable information, Comparability analysis, Exercise of good judgment, OECD Transfer Pricing Guidelines (2022), TPG 2022 Chapter II: Transfer Pricing Methods, Transactional net margin method (TNMM), Transactional profit methods, Transfer pricing methods
A comparability analysis must be performed in all cases in order to select and apply the most appropriate transfer pricing method, and the process for selecting and applying a transactional net margin method should not be less reliable than for other methods. As a matter of good practice, the typical process for identifying comparable transactions and using data so obtained which is described at paragraph 3.4 or any equivalent process designed to ensure robustness of the analysis should be followed when applying a transactional net margin method, just as with any other method. That being said, it is recognised that in practice the level of information available on the factors affecting external comparable transactions is often limited. Determining a reliable estimate of an arm’s length outcome requires flexibility and the exercise of good judgment. See paragraph 1.13 ... Read more

TPG2017 Chapter III paragraph 3.81

/ Comparability analysis, Compliance issues, Documentation, Exercise of good judgment, OECD Transfer Pricing Guidelines (2017)
When undertaking a comparability analysis, there is no requirement for an exhaustive search of all possible relevant sources of information. Taxpayers and tax administrations should exercise judgment to determine whether particular comparables are reliable ... Read more

TPG2017 Chapter II paragraph 2.74

/ Availability of reliable information, Comparability analysis, Exercise of good judgment, OECD Transfer Pricing Guidelines (2017), Transactional net margin method (TNMM), Transactional profit method, Transfer pricing methods
A comparability analysis must be performed in all cases in order to select and apply the most appropriate transfer pricing method, and the process for selecting and applying a transactional net margin method should not be less reliable than for other methods. As a matter of good practice, the typical process for identifying comparable transactions and using data so obtained which is described at paragraph 3.4 or any equivalent process designed to ensure robustness of the analysis should be followed when applying a transactional net margin method, just as with any other method. That being said, it is recognised that in practice the level of information available on the factors affecting external comparable transactions is often limited. Determining a reliable estimate of an arm’s length outcome requires flexibility and the exercise of good judgment. See paragraph 1.13 ... Read more