Editing Transfer pricing (section)

==OECD specific tax rules==
OECD guidelines are voluntary for member nations.  Some nations have adopted the guidelines almost unchanged.<ref>German law incorporates OECD guidelines by reference.{{Citation needed|date=July 2010}}  Note that while Canada and the United States are OECD members, each has adopted its own comprehensive regulations that differ in some material respects from the OECD guidelines.</ref>  Terminology may vary between adopting nations, and may vary from that used above.

OECD guidelines give priority to transactional methods, described as the "most direct way" to establish comparability.<ref>OECD Guidelines 2.5.</ref>  The Transactional Net Margin Method and Profit Split methods are used either as methods of last resort or where traditional transactional methods cannot be reliably applied.<ref>OECD Guidelines 3.50-3.51</ref>  CUP is not given priority among transactional methods in OECD guidelines.  The Guidelines state, "It may be difficult to find a transaction between independent enterprises that is similar enough to a controlled transaction such that no differences have a material effect on price."<ref>OECD Guidelines 2.8</ref>  Thus, adjustments are often required to either tested prices or uncontrolled process.

===Comparability standards===
OECD rules permit consideration of business strategies in determining if results or transactions are comparable.  Such strategies include market penetration, expansion of market share, cost or location savings, etc.<ref>OECD Guidelines 1.31-1.35.</ref>

===Transactional net margin method===
The transactional net margin method (TNMM)<ref>OECD Guidelines 3.26 ''et seq''.</ref> compares the net profitability of a transaction, or group or aggregation of transactions, to that of another transaction, group or aggregation.  Under TNMM, use of actual, verifiable transactions is given strong preference.  However, in practice TNMM allows making computations for company-level aggregates of transactions.  Thus, TNMM may in some circumstances function like U.S. CPM.

===Terms===
Contractual terms and transactions between parties are to be respected under OECD rules unless both the substance of the transactions differs materially from those terms and following such terms would impede tax administration.<ref>OECD Guidelines 1.28-29, 1.37</ref>

===Adjustments===
OECD rules generally do not permit tax authorities to make adjustments if prices charged between related parties are within the arm's length range.  Where prices are outside such range, the prices may be adjusted to the most appropriate point.<ref>OECD Guidelines 1.45-1.48</ref>  The burden of proof of the appropriateness of an adjustment is generally on the tax authority.

===Documentation===
OECD Guidelines do not provide specific rules on the nature of taxpayer documentation.  Such matters are left to individual member nations.<ref>OECD Guidelines 4.4.</ref>