In countries where tax legislations or tax authorities follow the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines, transfer pricing specialists tend to favor the transactional net margin method (TNMM) and comparable searches to assess the arm’s length nature of intra-group transactions. In this article from International Tax Review, NERA Director Dr. Emmanuel Llinares questions whether the practice of basing transfer pricing documentations on the TNMM is consistent with the economic profiles of multinational enterprises given that (1) one of the reasons for them being organized as multinational enterprises is often due to economies of vertical or horizontal integration and (2) they heavily rely on the development of intangibles in order to maintain or improve their profitability. The article presents an analysis of the application of the TNMM and comparable searches in Europe and discusses the remedies that profit split methods can offer.