The EdgarStat Blog explores issues in transfer pricing and application of the transactional net margin method (TNMM or CPM in the US) and other enterprise profit-based methods.
This discussion presents a simplified illustration of the issues with respect to the unspecified method applied in Medtronic III in contrast to the IRS' extreme CPM approach and a traditional RPSM approach based on sound financial economics.
Topics: US Transfer Pricing Residual Profit Split Method Unspecified Method US Internal Revenue Service Intangibles Tax Policy Medtronic Section 482 TNMM/CPM Tax Controversy
Read moreUse of the CPM/TNMM to determine royalty rates for valuable intangibles in transfer pricing is incompatible with basic financial economics.
Topics: DEMPE Royalty Rates OECD Guidelines US Internal Revenue Service Intangibles Tax Policy TNMM/CPM
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