Tools & technology
Benchmarking Database
A benchmarking database is a commercial data source containing financial and legal information on companies or transactions, used to identify comparables for testing whether intercompany pricing is arm's length. Tax teams search these databases by industry, geography, size and functional criteria to build sets of independent
Typical databases combine statutory financial statements, industry codes and ownership information across many jurisdictions, allowing analysts to filter for independence, activity and size criteria before running quantitative screens. Search strategies and rejection matrices are documented so the process can be replicated or
Results from a benchmarking database feed directly into local files, master files and calculation engines, providing the arm's length ranges against which actual intercompany margins are tested. Refreshing searches periodically, rather than reusing outdated comparables, helps keep documentation aligned with current market
In practice
What matters when applying benchmarking database
- Searches comparable company financial data
- Applies independence and size screening criteria
- Documents rejection matrices for transparency
- Supplies arm's length ranges for testing
- Requires periodic refresh of search results
Frequently asked
Common questions
How often should a benchmarking search be refreshed?+
Many groups refresh comparable searches every one to three years depending on local rules and industry volatility, while updating the financial data of existing comparables annually to keep tested margins current without a full new search each time.
What criteria are used to select comparables in a benchmarking database?+
Analysts typically filter by industry classification, geographic market, independence status, company size and functional similarity, then apply qualitative review of business descriptions to exclude companies that are not genuinely comparable.
See how the tooling handles this in practice
Our transfer pricing tools calculate intercompany charges, benchmark financing and reconcile the intercompany ledger from your own data. Book a short walkthrough and we will show the workflow on a scenario that matches your group structure, rather than a generic demo dataset.