Methodology, comparability, and the OECD framework, applied to the way goods are priced within a group.

FAQ

Questions on transfer pricing for goods.

• When is the CUP method preferred for goods?

  The Comparable Uncontrolled Price method is preferred when reliable internal or external comparable transactions exist for the same or substantially similar goods under similar conditions. Per the 2022 OECD Guidelines (Chapter II), CUP delivers the most direct application of the arm's length principle.

• How does TP for goods interact with customs valuation?

  Transfer pricing and customs valuation share the arm's length objective but apply different methodologies and timelines. Year-end TP adjustments may trigger customs re-valuation; alignment requires upfront design across the OECD Guidelines and the WCO Customs Valuation Agreement.

• What method fits a contract manufacturer in automotive?

  Contract manufacturers in automotive supply chains are typically routine assemblers; the Transactional Net Margin Method (TNMM) applied with a return on operating costs is the standard. Comparability factors include capacity utilisation and the risk allocation embedded in the master service agreement.