Reference · OECD-grounded · Updated 2026
Transfer pricing, defined precisely enough to use in a filing.
Every term gets a plain-English reading, the technical definition, a worked example, the mistakes that trigger adjustments, and a source label so you know whether you are reading authority or interpretation.
What are you trying to solve?
I've received an audit notice
Start with what the authority can adjust and how relief works, then check whether your documentation supports the position for the years under review.
I need to build documentation from scratch
Work top down: perimeter, transaction inventory, then the three tiers. Reconciliation to statutory accounts is what gets checked first.
We're moving IP or restructuring
Substance decides entitlement and valuation risk sits with you for years. Get the DEMPE evidence and the contemporaneous valuation right at the outset.
I want certainty before the risk crystallises
Rank the exposure honestly, then decide where to spend: remediation, documentation, or an agreement with the authorities.
Read it for your role
Documentation deadlines, controversy readiness, and policy design.
Arm's length principle
7 minThe rule that transactions between related companies should be priced as if the parties were independent.
Associated enterprises
4 minTwo enterprises are associated when one participates in the management, control or capital of the other, or the same persons do so for both.
Controlled transaction
4 minA transaction between two associated enterprises, and therefore the unit that transfer pricing rules test.
Comparability analysis
8 minThe process of finding uncontrolled transactions or companies similar enough to test whether a controlled outcome is arm's length.
Most appropriate method
6 minThe requirement to choose the transfer pricing method best suited to the facts, rather than following a fixed hierarchy.
Featured terms
DEMPE
6 minThe framework allocating intangible returns to the entities that perform and control development, enhancement, maintenance, protection and exploitation functions.
Transactional net margin method (TNMM)
7 minA method that tests the net profit margin a party earns from a controlled transaction against margins earned by independent companies.
Arm's length principle
7 minThe rule that transactions between related companies should be priced as if the parties were independent.
Country-by-country reporting (CbCR)
5 minAn annual report by large multinational groups showing revenue, profit, tax, employees and assets for every tax jurisdiction in which they operate.
Topics
Core principles
The foundations every transfer pricing position is built on.
Pricing methods
The five OECD methods and how the most appropriate one is chosen.
Documentation & compliance
Master file, local file, CbC reporting, and filing mechanics.
Intangibles & financing
DEMPE, hard-to-value intangibles, and intra-group loans.
Controversy & certainty
Audits, APAs, MAP, and dispute resolution.
For practitioners
Working on a live issue?
Start from the risk area rather than the alphabet. Controversy, documentation and intangibles each have their own reading path.
Go to topicsFor newcomers
Considering transfer pricing as a career?
What the job actually involves, the skills that get you hired, and a short knowledge check to see where you stand.
Careers in transfer pricingBook a TP Health Check
Unsure how your transfer pricing would hold up?
A fixed-scope review of your intercompany pricing, documentation and audit exposure — scoped to your jurisdictions, delivered as a written risk memo. First response within one business day.