Conclusions of Four of Five Transfer Pricing Methods

With comparable uncontrolled price method, price stems from comparable transactions between unrelated buyer and seller. Such comparisons may based on either and "external comparable price" from the open market or "internally generated comparable price" using the price that is paid or charged by the taxpayer in transactions with independent third parties.

With resale price method, the arm's length transfer price for business transactions between a taxpayer and its associated enterprises is establish by subtracting an appropriate re-sale profit margin form the price at which goods are re-sold by the associated enterprise to independent customers.

With profit split method, it is calculated to achieve a reasonable allocation of a controlled group's combined profit for related transactions regarding the relative value of each controlled taxpayer's contribution to the combined profit.

With the transactional net margin method, the arm's length price should be achieve a net operating profit for controlled transaction, and the profit is to be calculated as a percentage of an appropriate base, such