This article from Bloomberg BNA’s Transfer Pricing Forum examines the current German transfer pricing approach to the use of the profit split method. The authors address a number of issues, including official guidance on the application of the profit split method and its practical use by both taxpayers and tax administrations; scenarios in which the profit split method is most appropriate and commonly used; information useful in determining the arm’s length allocation under the profit split method; practical obstacles to obtaining or using this information; and limitations in the application of the profit split method.