In this episode, Silvana and Mikhail explore how local country-specific rules impact the use of the Transactional Net Margin Method (TNMM) in transfer pricing. They discuss how different regulations affect the selection of comparables and the calculation of the arm’s length range, using examples from Greece, Malaysia, Italy, and Brazil.

The episode highlights the importance of creating rigorous and defensible global/regional TNMM benchmarks incorporating local country-specific requirements. 

 Takeaways

• Different countries have specific regulations and practices that impact how TNMM Benchmarking analyses should be conducted..
• Common differences in local country regulations and practices include Independence criteria, Data availability rules, definition of arm’s length ranges, and Preference for local comparables.
• Cookie-cutter approaches typically do not work in addressing local rules. Each jurisdiction requires careful consideration and analysis to comply with local rules.
• Understanding local country requirements can save time and avoid disputes during transfer pricing audits.