Most countries follow the OECD Guidelines for transfer pricing, which emphasize the arm's length principle. This principle dictates that the transfer prices should be the same as if the transactions were between unrelated parties. However, the implementation of these guidelines can vary, leading to disputes. Tax authorities may use various methods to assess transfer pricing, including:
Comparable Uncontrolled Price (CUP) Method Resale Price Method Cost Plus Method Transactional Net Margin Method (TNMM) Profit Split Method