Why is benchmarking in transfer pricing so important? Because revenue authorities require solid economic references to justify the income allocation within a multinational group and for margins achieved on intercompany transactions relating to goods, services, royalties, and financing. Did you know that 70% of world trade is transfer pricing? Revenue authorities worldwide realize the importance and are demanding increased audit trails on benchmarking studies, with Germany and Hungary as recent examples.
In transfer pricing, benchmarking refers to a multi-step process to (a) select and audit trail the search for companies that perform similar activities as the company for which an arm’s-length remuneration needs to be determined, usually referred to as the “tested party” and (b) establishing the arm’s length profits of the “tested party” by reference to the profitability of the companies that perform similar activities in terms of functions performed, assets employed, and risks are taken.
Not many tax professionals have seen the inside of a benchmarking study. We want to change this and present to you the ins and outs of this important process. A benchmark study is an a-typical process for tax professionals. Typically, intermediaries engage interns or young TP professionals for the workstreams. The workstreams are non-tax technical and often considered repetitive and not very exciting for ambitious tax professionals. TaxModel accelerates where workstreams become repetitive. Therefore, TaxModel is the only company in the world that can show and prove every step of the analysis! TPbenchmark guarantees an end-to-end solution for all your goods and services benchmarks.
TaxModel will organize a webinar on the 15th of July 2021, with the following learning objectives:
- Set-up of a search strategy, the start of every benchmark analysis
- Selection of the initial set of comparable companies from a database
- Additional filtering of companies to optimize selection in the previous step
- Determination of rejection/acceptation parameters (keywords)
- Rejection of companies based on trade description / full description, including audit trails
- Rejection of companies based on full websites, including audit trails
- Review process
- PLI selection and working capital adjustment
- Final reports and audit trails
Save your seat! Sign up via the contact form below! Can’t attend live? You should still register! We’ll send out the recording after the webinar to all registrants.