Court decisions throw up different opinions on use of quotes
September 02, 2008
Peter Andersen of Transfer Pricing Associates highlights the contrast in the results for two taxpayers from Danish litigation over the use of price quotes in transfer pricing
The use of price quotes as economic references in transfer pricing analysis is disputed or unclear in many countries. The OECD Transfer Pricing Guidelines neither accept nor reject such references but instead state that in the chapter on intangibles that “[o]ffers to unrelated parties or genuine bids .... may also be taken into account”. The theoretical objection against using quotes is that they are not actual transactions as long as they are not accepted and therefore cannot qualify as comparable uncontrolled prices. Nevertheless, in the absence of other and better economic references, the issue of whether a quote can be used or not regularly appears in practice.
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