TPG2022 Chapter I paragraph 1.36

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The economically relevant characteristics or comparability factors that need to be identified in the commercial or financial relations between the associated enterprises in order to accurately delineate the actual transaction can be broadly categorised as follows:

  • The contractual terms of the transaction (D.1.1).
  • The functions performed by each of the parties to the transaction, taking into account assets used and risks assumed, including how those functions relate to the wider generation of value by the MNE group to which the parties belong, the circumstances surrounding the transaction, and industry practices (D.1.2).
  • The characteristics of property transferred or services provided (D.1.3).
  • The economic circumstances of the parties and of the market in which the parties operate (D.1.4).
  • The business strategies pursued by the parties (D.1.5).

This information about the economically relevant characteristics of the actual transaction should be included as part of the local file as described in Chapter V in support of a taxpayer’s analysis of its transfer pricing.

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