Small to medium sized enterprises are entering into the area of transfer pricing and the number of cross-border transactions is ever increasing. Although the arm’s length principle applies equally to small and medium sized enterprises and transactions, pragmatic solutions may be appropriate in order to make it possible to find a reasonable response to each transfer pricing case.
TPG2022 Chapter III paragraph 3.83
Category: C. Compliance issues | Tag: Administrative-/compliance burden, Comparability analysis, Compliance issues, Documentation, Small to medium sized enterprises
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Related Guidelines
- TPG2022 Chapter III paragraph 3.80One question that arises when putting the need for comparability analyses into perspective is the extent of the burden and costs that should be borne by a taxpayer to identify possible comparables and obtain detailed information thereon. It is recognised that the cost...
- TPG2022 Chapter III paragraph 3.82It is a good practice for taxpayers to set up a process to establish, monitor and review their transfer prices, taking into account the size of the transactions, their complexity, level of risk involved, and whether they are performed in a stable or...
- TPG2022 Chapter III paragraph 3.81When undertaking a comparability analysis, there is no requirement for an exhaustive search of all possible relevant sources of information. Taxpayers and tax administrations should exercise judgment to determine whether particular comparables are reliable....
- TPG2022 Chapter III paragraph 3.33Use of commercial databases should not encourage quantity over quality. In practice, performing a comparability analysis using a commercial database alone may give rise to concerns about the reliability of the analysis, given the quality of the information relevant to assessing comparability that...