Transfer Pricing

At Nordisk Aktuarservice, we help organisations strengthen their transfer pricing positions by providing independent second opinions based on robust statistical methods and data-driven analysis.

The arm’s length principle forms the foundation of transfer pricing, and the interquartile range has evolved into a de facto industry standard for its interpretation. However, its application can at times become overly rigid. In practice, underlying datasets are rarely perfect, and outcomes are naturally influenced by normal commercial variation. Our role is to bring an appropriate level of nuance by assessing the stability and reliability of a given arm’s length range and the implications for its practical application.

We review existing benchmark studies with a particular focus on variability, data quality, and the sensitivity of results to reasonable changes in assumptions. Rather than replacing established transfer pricing methodologies, we enhance them by applying well-established statistical techniques that help quantify and visualise uncertainty. This enables organisations to move beyond a narrow compliance-focused perspective and develop a more informed understanding of risk and defensibility. 

The outcome is a clear, decision-focused assessment. We evaluate whether the selected financial indicator, typically a profitability measure, falls within a defensible arm’s length range, while also highlighting the sensitivity of the conclusion to the underlying data. This can strengthen management's decision-making framework and contribute constructively to discussions with tax authorities.

Our approach is based on the recognition that transfer pricing should not be treated as a purely mechanical exercise. While the interquartile range remains a useful and widely accepted tool, it does not always capture the full economic reality of intra-group transactions.

By applying established statistical methodologies, we provide additional insight that better reflects how businesses operate in practice. These approaches are not merely theoretical. Statistical methods have been considered and accepted in legal and regulatory contexts, demonstrating the value of a more nuanced interpretation of the arm’s length principle.

Through rigorous analysis and transparent communication of uncertainty, we help organisations build stronger, better-supported transfer pricing positions while maintaining alignment with established transfer pricing frameworks and regulatory expectations.