Transfer pricing: comparables under attack

SPEED READ Transfer pricing depends on the availability of reliable data about pricing between independent parties in comparable circumstances. Comparables are under attack because, despite similarities to the group transaction, differences exist. How much further analysis is possible or advisable in practice to meet the comparability standard of the OECD Revised Transfer Pricing Guidelines depends on how well the comparables reflect those features of the intra-group arrangements which affect price or profitability. As the Revised Guidelines emphasise, the search for comparables is only part of the comparability analysis, which should be rooted in how the business operates.