Work out transfer pricing margin instantly with clear inputs, formula shown and shareable results.
Intra-group services must be priced as independent parties would, commonly using a cost-plus markup benchmarked against comparables. Charging below the comparable range invites an upward adjustment and tax on the difference.
Cost plus method
Arm's length price = cost base × (1 + comparable markup); adjustment = arm's length - charged
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
It shifts profit out of the service provider's jurisdiction, so that authority adjusts the price upward and taxes the difference.
A benchmarking study supporting the markup, plus local and master files in most jurisdictions.