Data based on the results of transactions between unrelated parties provides the most objective basis for determining whether the results of a controlled transaction are arm’s length. Thus, in determining which of two or more available methods (or applications of a single method) provides the most reliable measure of an arm’s length result, the two primary factors to take into account are the degree of comparability between the controlled transaction (or taxpayer) and any uncontrolled comparables, and the quality of the data and assumptions used in the analysis. In addition, in certain circumstances, it also may be relevant to consider whether the results of an analysis are consistent with the results of an analysis under another method. These factors are explained in paragraphs (c)(2)(i), (ii), and (iii) of this section.
§ 1.482-1(c)(2) Determining the best method.
Category: (c) Best method rule, Transfer Pricing Guidelines, US IRC Section 482 on Transfer Pricing, § 1.482-1 Allocation of income and deductions among taxpayers | Tag: Best Method Rule, Most appropriate method (MAM), Most reliable data
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