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what is the ideal mark up percentage for cost plus model for IT service company

AI Summary

Transfer pricing guidance on cost-plus markup for IT service companies may determine arm's length pricing approaches. Determination of an ideal markup percentage for the cost-plus model in transfer pricing for IT service companies requires selecting an arm's-length markup that reflects functions performed, assets used and risks assumed, supported by comparable uncontrolled transactions, industry comparables and a reliable cost base, with appropriate documentation to satisfy income-tax scrutiny.