Transactional Profit Split Method

Heike Schenkelberg () and Anna Rottke ()
Additional contact information
Heike Schenkelberg: Deloitte GmbH
Anna Rottke: Deloitte GmbH

A chapter in Intangibles in the World of Transfer Pricing, 2021, pp 231-259 from Springer

Abstract: Abstract In light of BEPS discussions and digitalization of the economy in recent years, taxpayers and tax authorities are increasingly interested in using the value creation of a group’s entities to estimate the respective profit allocation. In this context, the Transactional Profit Split Method (“TPSM”), one of the transfer pricing methods available in the OECD Transfer Pricing Guidelines, plays an increasingly important role in discussions about arm’s length profit allocations. However, the application of the method is often challenging in practice. This chapter first summarizes the most recent guidance published by the OECD and the EU Joint Transfer Pricing Forum. Reflecting this guidance, we have compiled a practitioner’s checklist for the application of TPSM. Finally, based on the outcome of two Advance Pricing Agreements between the relevant tax authorities of different jurisdictions, this chapter illustrates examples of reasonable considerations with respect to the parameters of a profit split that have been mutually accepted amongst various tax jurisdictions.

Keywords: Profit split; Transfer pricing methods; Intangibles; Contributions to intangibles; APAs (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-73332-6_13

Ordering information: This item can be ordered from
http://www.springer.com/9783319733326

DOI: 10.1007/978-3-319-73332-6_13

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().