ISSN: 2319-7285
Daniela Baluchová
Due to lack of information on comparable companies, transfer pricing practitioners deal with a problem how to benchmark entities having very limited functional and risk profile (ie commissionaire; toll manufacturer etc.). This paper demonstrates the application of the working capital adjustments for determining the arm’s length profitability of a commissionaire using formulation as presented in the work of Miesel and Verma (2001). Subsequently, critical aspects to be considered when applying working capital adjustments are discussed.