Episode 6: the legal implementation of profit splits in transfer pricing

The profit splits method is the only one of the five commonly used TP approaches that considers the contributions of more than one party. In this episode, Paul Sutton explores some of the practical issues involved in legally implementing it:

• The kinds of scenarios in which the profit splits method might be used
• The role that intercompany agreements play in legally implementing it
• How the ICAs are affected by the decision to base the approach on actual profits or anticipated profits
• The key steps when creating ICAs to implement profit splits
• Common errors when applying the profit split method.