Fundamentals
Transfer Pricing Study
A transfer pricing study is a detailed analysis prepared to determine and justify the pricing of intercompany transactions within a multinational group. It combines functional analysis, selection of an appropriate pricing method, and benchmarking against comparable independent companies or transactions to support arm's length.
A typical transfer pricing study begins with an industry and functional analysis, examining what each related entity does, what assets it owns and what risks it bears. This analysis informs the selection of the most appropriate pricing method, whether that is comparable uncontrolled price, cost plus, resale price, TNMM or.
Once the method is chosen, the study identifies comparable companies or transactions using commercial databases, calculates an arm's length range of margins or prices, and benchmarks the tested party's actual results against that range. The final report documents these findings and forms the core evidence supporting a group's.
In practice
What matters when applying transfer pricing study
- Combines functional, industry and economic analysis
- Determines the most appropriate pricing method
- Uses comparable data to establish an arm's length range
- Benchmarks actual results against that range
- Forms the evidentiary basis of local file documentation
Frequently asked
Common questions
How long does a transfer pricing study take?+
Timelines vary with complexity, but a typical study for a single transaction type can take anywhere from a few weeks to a couple of months, factoring in data gathering, comparable searches, functional interviews and report drafting before finalising the analysis.
Who should prepare a transfer pricing study?+
Studies are usually prepared by in-house tax teams with specialist support, external transfer pricing advisers, or increasingly through dedicated software that automates benchmarking and documentation, provided the underlying functional and economic analysis remains robust and well evidenced.
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.