PodCast: Q&A with Solomon Choge – Comparability Analysis

In this PodCast we talk to Solomon Choge.  We share 6 questions dealing with Transfer Pricing Methods that our Postgraduate Diploma in Transfer Pricing students have asked Solomon in the past and that we felt might be relevant to you.

Please see questions below:

Question 1

To start off, just a question on Royalty Range.

Royalty Range uses actual agreements, so it is possible to check if they are indeed comparable to what you are looking for. How is it possible to contain actual agreements? Usually, this kind of contract is strictly confidential to the parts in the agreement…

Question 2

It seems to me that the Profit Split is very hard to apply by the Tax Authority perspective.

As I see it, the only user that would have enough business knowledge and access to information and data would be a tax professional from corporate teams, on headquarters.

People from subsidiaries would hardly have such a global view and access to data, and the same is valid for tax authorities, that are external to the company.

Does it make sense?

Question 3

For me, it is not 100% clear the difference of calculation between:

  • the Resale Minus and TNMM Net Resale Minus, and
  • and the he same for the Cost Plus and TNMM Cost Plus Margin

Can you give a practical and numerical example of the calculation to clarify?

Question 4

Is it true that irrespective of the TP method adopted, the Arm’s length price will be the same or similar, provided that the comparables are the same?

Question 5

Where comparables are from different geographical regions, How do you identify and eliminate the effect of the differences in “economic circumstances” when comparing controlled and uncontrolled transactions ?

Question 6

Regarding comparability analysis, this is more a request than an actual question…

Can we go trough few samples on how to make comparability adjustments using real figures and actual case rather than theory?

Solomon Choge is the head of sales in the Middle East and Africa for Royalty Range and has vast experience in Transfer Pricing and International Tax.

He has consulted extensively with both taxpayers and revenue authorities alike, and has previously worked at both Thomson Reuters and Bureau van Dijk.

Over and above all of that Solomon has been a senior lecture with the IITF’s Postgraduate Diploma in Transfer Pricing and the TP Masterclass Series for 8 years, where lectures specifically on TP Methods, Databases and Comparability Analysis.

Related Articles