Multinational enterprises across the globe have to comply with transfer pricing documentation requirements. To provide the documentation which is fully compliant with tax legislation it should contain the calculation of arm’s length range – comparability analysis.
In order to perform such analysis it is necessary to use one of the existing transfer pricing databases. This article shows an overview of most common transfer pricing benchmarking databases on the market.
All databases can be divided into 3 types depending on the searching information:
- comparable companies (for sales of goods and intra-group services transactions);
- interest rates (for financial transactions);
- remuneration rates (for intangible transactions).
Globally there are several providers of databases for each type:
- Orbis contains companies’ information across the globe. Database provide with profit and loss accounts and balance sheets; business overviews, industry codes and access to companies websites; ownership structures (including indirect ownership and beneficial owners).
Amadeus – part of Orbis that contain information on companies across Europe.
- Royalty range – company financials database contains companies’ financials from P&L and balance sheets; companies website addresses and detailed companies descriptions; ownership charts showing connected entities.
- Thomson Reuters Onesource – company data contains public and private companies’ information, including financial statements, business segment content and industry description.
- KtMINE contains aggregated repositories of IP data and documentation, including agreements, patents, trademarks, royalty rates.
- Thompson Reuters Onesource – intangible database provider of KtMINE’s licensing and royalty rate data.
- Royalty range – royalty rates database contains information on third-party license agreements, including summaries of the agreement terms.
- RoyaltyStat contains information on royalty rates extracted from license agreements, including interactive transfer pricing analytics.
- RoyaltySource contains information on licenses related to technology (patent, know-how, trade secret, and business method), software, trademark, trade name, brand or logo, copyright, right of publicity, as well as franchise agreements, etc.
- Bloomberg contains information on loans and bonds, including stand-alone credit worthiness analysis.
- Royalty range – loan interest rates database contains data on third-party loan agreements, including credit ratings, interest rates, financing terms, currencies, fees, collateral, repayment terms, etc.
- Loan Connector contains data and analysis on the global loan markets.
- S&P Global Market Intelligence (Compustat Fundamentals) contains information for assess the credit risk of rated and unrated, public and private companies across the globe.
As can be observed there are some providers that has databases for several types of the controlled transactions.
One of the best databases which includes data for the analysis of all types of the controlled transactions in terms of price-quality ratio is Transfer Pricing Benchmarking Database by Intra Pricing Solutions.
The Transfer Pricing Benchmarking Database consists of four search engines. Each of them can be utilised for a different set of results:
- Comparable Companies in Europe, Asia and North America: establish at arm’s-length remuneration using TNMM, Resale Minus and Cost Plus methods;
- Intermediary Financing Remuneration: establish at arm’s-length remuneration for companies involved in Intermediary Financing and Cash Pooling activities using CUP method;
- Interest Rate: establish at arm’s-length Interest Rate on Intercompany Loans using CUP method;
- Royalty: estimate the market rate for Licensing of Intellectual Property and Service Fees using CUP method.
To get more information about Transfer Pricing Benchmarking Database please follow the link.