ARTICLE · 01 JULY 2025

Benchmarking In Transfer Pricing: How To Support Your Pricing With Reliable...

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At the core of every transfer pricing policy is the requirement to demonstrate that related-party transactions are consistent with market terms. Benchmarking is the process of identifying and applying comparable data to support this principle.

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At the core of every transfer pricing policy is the requirement to demonstrate that related-party transactions are consistent with market terms. Benchmarking is the process of identifying and applying comparable data to support this principle.

Done well, it can strengthen documentation and reduce the risk of tax authority enquiries. This issue explores the practicalities of benchmarking and how to use data effectively.

What Is Benchmarking in Transfer Pricing?

Benchmarking involves comparing the terms of related-party transactions to those that would be agreed between independent entities. The goal is to determine an arm's length range or price that reflects commercial reality.

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