Transfer Pricing Benchmarking

Transfer Pricing Benchmarking: A Guide for Finance and Business Professionals

In the ever-evolving landscape of global business, transfer pricing benchmarking remains a critical yet complex task. As companies strive to align their intercompany transactions with the arm’s length principle, several challenges can arise, potentially impacting operational efficiency and compliance. 

A look into Transfer Pricing Benchmarking 

Transfer pricing benchmarking is essential for companies operating internationally, ensuring that their intercompany transactions meet regulatory standards, and are priced as if conducted between unrelated parties. Despite its importance, this process is filled with difficulties that can confuse even the most seasoned professionals. There are plenty of common mistakes, and those mistakes have consequences. Luckly we are here to help you. Let’s go over some of those common mistakes:

 

Data Accessibility and Quality: Accessing high-quality and relevant financial data for your benchmark study can be challenging. For smaller companies, these databases may be too expensive.

Finding Comparable Data: Identifying truly comparable companies is a challenging task, given the unique nature of many businesses and transactions. This requires expertise in the field of benchmarking, and transfer pricing.

Regulatory Compliance: With tax regulations constantly evolving, staying compliant locally across different jurisdictions adds another layer of complexity to consider.

Documentation and Justification: Documenting the benchmarking process and justifying the selections and adjustments made is crucial for defending during audits.

 

Let’s have a look at what we can do about these challenges. In many cases benchmarking is too expensive and will not be reasonably accessible by smaller companies. Also, intercompany transactions of smaller volumes may not justify expensive benchmark studies. This is the case when the tax risk is lower than the actual cost of a benchmark study.  

Coperitas makes this possible for smaller companies as well with our practical and budget friendly solution. Furthermore, finding comparable companies and keeping track of local regulations regarding benchmark studies can be difficult. This requires expertise to do. Is our team lacking the skills and expertise to benchmark? Or does your team have internal expertise to perform benchmark studies in-house? Either way, we have you covered with Benchmarking by Coperitas.   

Last but not least, documentation of the benchmarking process is important when sharing the study with tax authorities. Coperitas documenter is super flexible and suitable to automatically generate these reports for you enabling you to determine your next steps with confidence. 

Made for everyone 

You aren’t looking to overpay for large databases of which you use only a small part! That is why Coperitas goes for a cost-efficient approach. With us you pay for what you need and require. Are you looking for a practical approach or do you require a full OECD compliant benchmark with report? We are here to assist you. 

Let’s summarize  

Benchmarking is a difficult, expensive and time-consuming task, task, there is so much more you could do with your time and budget. Thats why we would love to help you with our newest budget-friendly solution so you can use your time to focus on other important matters! Do you have any further questions, concerns, or remarks? Be sure to contact us. Together we will find out what works best for you.