The State of the Art in Comparability for Transfer Pricing
31 March 2010
By Pim Fris and Sébastien Gonnet
Since the introduction of the 1995 OECD Transfer Pricing Guidelines, there has been a marked growth in popularity of the transactional net margin method (TNMM) to assess the arm's length nature of intra-group transactions. The increasing use of the TNMM has led to a tendency towards reliance upon standardized benchmarking searches, at the expense of more comprehensive and economically sound approaches. In this article from the International Transfer Pricing Journal, NERA Special Consultant Pim Fris and Senior Consultant Sébastien Gonnet suggest that, due to recent developments in the area of transfer pricing -- including clearer requirements from tax authorities, courts, and multinational enterprises -- this tendency may now come to an end.
