Benchmark Analyses

What is a benchmark analysis and why is it performed?

A benchmark analysis is the core of transfer pricing: it determines what pricing would be considered arm’s‑length between independent parties. In practice, a benchmark compares an intra‑group function or transaction to external market data – such as comparable companies, services, distribution margins or royalty rates.

The purpose of benchmarking is to demonstrate that the pricing applied within the group is objectively justified, economically consistent, and defensible in a tax audit. A well‑designed benchmark provides a clear arm’s‑length range within which the pricing can be supported, and it forms a central part of both documentation and audit defence.

Benchmark Analyses (TNMM, CUP, Cost‑Plus, Resale Minus, Profit Split)

We help companies build benchmark analyses that are both technically robust and aligned with real business operations.

What we do:

Selection of the appropriate method:

• TNMM (most common for services and distribution)

• CUP (e.g., royalties and financing transactions)

• Cost‑Plus (less frequently applied as a standalone method)

• Resale Minus (distribution models without further processing or value‑adding)

• Profit Split (situations with shared value creation or significant intangibles)

Execution and analysis:

• Database searches and screening of comparable companies

• Determination of the arm’s‑length range and target margin

• Clear and consistent documentation of the analysis

Benefits:

• Predictable and defensible pricing

• Strong foundation for documentation and tax audits

• Clear link to the company’s operational structure and risks

Get in touch

If your company needs a defensible, audit‑ready benchmark analysis – or you want to assess whether your current model is still fit for purpose – I’m here to help. I build clear, transparent and audit‑resilient analyses that support both documentation and practical pricing decisions.