Validate Pricing. Select Right Comparables. Stay Arm’s Length Compliant.
Benchmarking is the core of transfer pricing compliance.
Incorrect comparables or flawed analysis can lead to significant adjustments and disputes.
At N D Savla & Associates, we provide accurate and defensible benchmarking analysis to support your transfer pricing strategy.
What is Benchmarking Analysis?
Benchmarking analysis involves comparing related party transactions with similar uncontrolled transactions to determine arm’s length pricing.
It forms the basis for transfer pricing documentation and audit defense.
- Selection of most appropriate method
- Identification of comparable companies
- Financial and economic analysis
- Computation of arm’s length range
- Documentation and reporting
Methods Used in Benchmarking
- Comparable Uncontrolled Price (CUP) Method
- Transactional Net Margin Method (TNMM)
- Resale Price Method (RPM)
- Cost Plus Method (CPM)
- Profit Split Method (PSM)
Who Needs Benchmarking Analysis?
- Companies with international transactions
- Entities dealing with associated enterprises
- Businesses preparing TP documentation
- Companies under TP scrutiny or audit
Risks of Incorrect Benchmarking
- Transfer pricing adjustments
- Penalty up to 2% of transaction value
- Litigation and disputes
- Rejection of TP study
Our Approach
- Understanding transaction and business model
- Selecting appropriate TP method
- Identifying reliable comparables
- Conducting financial analysis
- Preparing defensible benchmarking report
Why Choose N D Savla & Associates?
Accurate Comparables
Reliable selection of comparable companies.
Strong Analysis
Precise financial and economic evaluation.
Defensible Reports
Prepared for audits and litigation.
Frequently Asked Questions
What is benchmarking analysis?
Comparison of related transactions with market data.
Why is it important?
To ensure arm’s length pricing compliance.
What methods are used?
CUP, TNMM, RPM, CPM, and PSM.
What are comparables?
Similar companies used for analysis.
Which firm is best for benchmarking?
N D Savla & Associates provides expert services.