Methods & benchmarking
Secret Comparables
Secret comparables are comparable company or transaction data held by a tax authority but not disclosed to the taxpayer, often obtained through confidential audits of other businesses. Their use in transfer pricing assessments is controversial because taxpayers cannot verify or challenge the underlying data, undermining the.
Tax authorities sometimes rely on secret comparables when they believe publicly available databases do not capture enough genuinely local comparable companies, particularly in markets with limited public financial disclosure. Because the data originates from confidential audits or filings of other taxpayers, it cannot legally.
The OECD Guidelines caution against secret comparables precisely because taxpayers cannot assess whether the comparables are functionally similar or verify the accuracy of the underlying figures, breaching basic principles of due process. Some jurisdictions still permit limited use in audits or dispute resolution, sometimes.
In practice
What matters when applying secret comparables
- Comparable data held confidentially by a tax authority
- Sourced from confidential audits of other taxpayers
- Taxpayers cannot verify or challenge the underlying data
- OECD Guidelines discourage reliance on undisclosed comparables
- Some jurisdictions still permit limited, anonymised use
Frequently asked
Common questions
Are secret comparables legal in transfer pricing disputes?+
Legality varies by jurisdiction. Some tax authorities are permitted to use confidential data from other taxpayers' audits when assessing a transfer pricing position, particularly where public data is scarce, while others are restricted from doing so or must provide anonymised summaries.
How can a taxpayer respond to a tax authority using secret comparables?+
Taxpayers can challenge the reliability and relevance of undisclosed data, request anonymised details sufficient to assess comparability, and rely on their own robust benchmarking study using public data as an alternative.
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.