1
Introduction ... 1
1.1 Background ... 1
1.2 Purpose and approach ... 2
1.3 Method ... 2
1.4 Delimitations ... 2
1.5 Outline ... 3
2
Transfer pricing rules ... 4
2.1 Introduction ... 4
2.2 OECD TP Guidelines ... 4
2.2.1 General ... 4
2.2.2 Arm’s length principle ... 6
2.2.3 Comparability analysis ... 6
2.3 Swedish transfer pricing rules ... 7
2.3.1 Accepted transfer pricing methods ... 7
2.3.2 Arm’s length principle ... 8
2.3.3 Comparability ... 8
3
TNMM in theory ... 10
3.1 Introduction ... 10
3.2 History of the transfer pricing methods ... 10
3.3 OECD ... 12
3.3.1 General about TNMM ... 12
3.3.2 Application of the TNMM ... 14
3.3.3 Profit level indicator ... 16
3.4 Sweden ... 16
3.5 Discussion and Conclusion ... 17
4
TNMM in practice ... 18
4.1 Introduction ... 18
4.2 How countries deal with the TNMM ... 18
4.2.1 Statistics ... 18
4.2.2 Practical application ... 18
4.2.3 Enterprises that apply TNMM ... 23
4.3 The Swedish Tax Agency ... 23
4.4 CPM versus TNMM ... 24
4.5 Discussion and conclusion ... 26
5
Proposed revision of the OECD TP Guidelines ... 28
5.1 Introduction ... 28
5.2 Hierarchy of the transfer pricing methods ... 28
5.2.1 Traditional transaction methods & transactional profit methods ... 28
5.2.2 Most appropriate method ... 28
5.3 Maintaining the last resort status ... 29
5.4 Changing the last resort status ... 29
5.5 Proposed amendments ... 29
5.5.1 General ... 29
5.5.3 Traditional transaction methods ... 30
5.5.4 Other methods ... 30
5.5.5 TNMM ... 30
5.6 Discussion and conclusion ... 31
6
Analysis... 33
6.1 Introduction ... 33
6.2 TNMM in theory ... 33
6.3 TNMM in practice ... 33
6.4 The proposed amendments ... 35
7
Conclusions and recommendations ... 36
7.1 Introduction ... 36
7.2 Maintaining or changing the last resort status ... 36
7.3 Recommendations ... 36