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  • Appendix 5: Main pricing methodologies

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    The arm's length pricing methodologies should be identified using the codes listed below.

    Arm's length pricing method

    Code

    Apportionment of costs

    1

    Apportionment of income

    2

    Comparable uncontrolled price method

    3

    Cost-contribution arrangement

    4

    Cost-plus method

    5

    Fixed mark-up applied to cost

    6

    Fixed percentage of resale price

    7

    Marginal costing

    8

    Profit split method

    9

    Resale price method

    10

    Transactional net margin method

    11

    Transactional net margin method (whole-of-entity)

    12

    Other arm's length methods

    13

    No transfer pricing method used

    14

    Further Information

    The 'fixed mark-up applied to cost' and 'fixed percentage of resale price' methodology codes should be used when 'administrative practice' as described by TR 99/1Income tax: international transfer pricing for intra-group services has been utilised to set the pricing of intra group services. See Appendix 9 for when to use 'Transactional net margin method (whole-of-entity)' methodology.

    End of further information
    Last modified: 08 Aug 2014QC 26054