Ch. 26 - Transfer Pricing

Question 1

Transfer Pricing Methods (s)

Answer 1

1. comparable uncontrolled price
2. resale price method
3. cost plus method

Question 2

Comparable Uncontrolled Price

Answer 2

reviewing similar transactions that are at arms length, to determine a price

Question 3

Resale Price Method

Answer 3

determining what the company would resell the product for, to determine a price

Question 4

Cost Plus Method

Answer 4

take the cost plus a reasonable gross profit to determine a price

Question 5

Contemporaneous Documentation

Answer 5

1. property or services sold
2. terms and conditions of the transaction
3. identify and relationship of participants
4. functions performed, property used or contributed, and risks assumed in transaction
5. data and methods considered to determine transfer price
6. assumptions, strategies and policies used that influenced transfer price

Question 6

T106 Return

- when required

Answer 6

1. when trxn with non-residents are over $1M