Comparability Analysis in Transfer Pricing

Today, in the practice of enterprises engaged in transactions with related parties, problems arise in accounting for transfer pricing, including the absence of a theoretical study of the process of comparing transfer prices. The purpose of the article is to determine the essence and main stages of the comparability analysis in transfer pricing. The author uses methods of induction and deduction, methods of the theoretical generalization, the comparison and the graphic representation. The concept of controlled and uncontrolled operations in the application of transfer prices was investigated. The conditions under which two operations can be compared were considered. The main factors affecting the price of a business transaction and are taking into account when determining comparable transactions were determined. The influence of the chosen transfer pricing method on the choice of characteristics of business transaction for the analysis of comparability was determined. The risks that are accepted by the parties during the implementation of the business transaction were systematized. Such risks require compulsory research during the carry out of functional analysis. The typical process was illustrated that is recommended to be observed when the comparability analysis carrying out and the main steps of such process were described. The conditions for the realization of a business transaction that affect on pricing were established. The article also explores the various sources of information on the conditions for business transactions between independent parties and the level of fixed prices in such transactions, which can be used for the comparability analysis. The author proposes use the international commercial and alternative internal databases for the comparability analysis.