RoyaltyStat Blog

Gross Profit Methods are Unreliable

Posted by Ednaldo Silva on Jun 14, 2016 5:59:10 AM

If an enterprise makes or buys goods to sell, the cost of goods sold (COGS) can be deducted from net receipts. However, to determine COGS, the inventory at the beginning and end of each tax year must be valued. Consider the symbols:

Comparable Royalty Rates

Posted by Julia Vasconcellos on Feb 23, 2016 9:03:53 AM

Transfer pricing based on comparables is the foundation of the U.S. Treasury Regulations (“Treas. Reg.”) § 1.482 (published in 1994, as amended), the OCED Transfer Pricing Guidelines (1995, 2010), and several other country-specific transfer pricing regulations around the world. 

In theory, the Treas. Reg. § 1.482 and the OECD Guidelines list five factors of comparability with a pretty nomenclature that read objective and reasonable.  They are characteristics of property or services, functions performed, contractual terms, risks assumed, and economic conditions (geographic market).