Transfer-pricing comparability is determined by the real...

Transfer-pricing comparability is determined by the real operational character of margin items, functional and risk profiles, consistently applied persistent-loss and aggregate related-party transaction filters, and economic circumstances such as turnover and extraordinary events. Under TNMM, working-capital differences require analysis based on average receivables, payables and inventory; delayed associated-enterprise receivables do not warrant notional interest where a debt-free enterprise bears no interest cost and no financing benefit is established. Medical-product distribution may be benchmarked under the Resale Price Method using comparable gross margins, while adjustments must be limited to associated-enterprise international transactions. Intra-group services cannot be valued at nil where actual business use is demonstrated without a valid uncontrolled comparable analysis or proof of shareholder activity.