The combined effect of the globalisation of entrepreneurial responsibilities within multinationals and the OECD's BEPS initiative puts traditional one-sided transfer pricing (TP) methods under increased pressure. NERA Managing Director Dr Yves Hervé and Associate Director Philip de Homont show how transactional net margin method (TNMM)-type TP solutions can be made sustainable for the future.
In a previous article in this series, we described the necessity of rethinking transactional net margin method (TNMM) studies and enhancing them with economic analysis. NERA Economic Consulting Managing Director Yves Hervé and Associate Director Philip de Homont describe how economic adjustments can be used to improve the quality of benchmarking analyses.
In TP audits around the world, tax authorities are starting to use the development, enhancement, maintenance, protection, and exploitation of intangibles (DEMPE) concept that was recently established by the OECD.
The OECD BEPS initiative has introduced numerous likely challenges to transfer pricing structures defended through application of the transactional net margin method (TNMM). This article focuses on the economic analysis enhancements needed to make TNMM-type transfer pricing solutions sustainable in the future.
In the first of a series on transfer pricing technical challenges and solutions to changing economic and regulatory environments for global multinationals, this article focuses on the remuneration of top management functions in the inter-company context.
