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Transfer Pricing Glossary

107 terms, A to Z — the definitions every TP study is built on: methods and PLIs, benchmarking and screening, documentation and compliance, the India-specific rules, Pillar Two, and the Quartyl product terms. Each term links to the guide that puts it to work.

Popular terms

Arm's Length Principle (ALP): Definition and How It Works TNMM (Transactional Net Margin Method): Definition and PLIs Functional Analysis (FAR): Functions, Assets and Risks Explained Tested Party: Definition, Selection Logic and Documentation Interquartile Range (IQR): The OECD Arm's Length Range OP/OC (Operating Profit to Operating Costs): Definition and Uses Safe Harbour: Definition, India\'s 10AA/10AB and Limits Rule 10D: Local File Requirements Under India's TP Rules TPO (Transfer Pricing Officer): Powers, Process and Adjustments Pillar Two: The 15% Global Minimum Tax at a Glance DEMPE: Development, Enhancement, Maintenance, Protection, Exploitation Comparable Set: The Group of Companies That Carries the Range

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Core concepts

15 terms

Methods

9 terms

PLIs & statistics

16 terms

Benchmarking

9 terms

Documentation

10 terms

Jurisdiction-specific

15 terms

Transactions

14 terms

International tax

14 terms

Quartyl product terms

5 terms

All terms A–Z

A

Arm's Length Principle (ALP): Definition and How It Works Arm's Length Range: IQR, Mid-Point and Testing the Price AAR (Advance Ruling): Fixing the TP Method Before the Years Are Filed Add-on: The TPO’s Premium Over the Benchmark Margin Accept-Reject Matrix: The Comparable-by-Comparable Decision Record Audit Packet: The Evidence Export That Defends the Study

B

Best Method Rule: How the OECD Chooses the Right Method Berry Ratio: The Related-Party Payables Indicator BEPS Action 13: The Three-Tier Documentation Standard BEPS: The OECD/G20 Base Erosion and Profit Shifting Project Benchmark Refresh: When and How to Re-run the Comparables Study Buy-Sell Arrangement: The Double-Distribution Model Base Erosion: What the BEPS Fight Is Actually Against

C

CbCR: Country-by-Country Reporting Defined and Explained Comparable Companies: What Makes a Company Comparable Controlled Transaction: Definition, Thresholds and Coverage Contemporaneous Documentation: The 30-Day Rule in India Cost Plus Method: Definition, Cost Base and Mark-Up CUP (Comparable Uncontrolled Price): Definition and Conditions CPM (Comparable Profits Method): Definition and the US Practice Comparability: The 5 Factors and the 2 Screens Comparable Set: The Group of Companies That Carries the Range Country Premium: The Adjustment for Where the Comparable Sits Contract Manufacturer: The Producer That Owns No IP or Customers Contract R&D: Research Performed for the Client, Routine Return Cost Sharing Arrangement (CSA): Sharing the Cost of Building IP Cash Pooling: The Intra-Group Cash Netting Arrangement

D

DEMPE: Development, Enhancement, Maintenance, Protection, Exploitation Dispersion: The Spread of the Comparables Distribution Documentation Threshold: The Trigger for the TP Documentation Duties Distributor: The Buying and Reselling Entity in a TP Structure DTA: The Double Taxation Agreement That Prevents Double Tax Defensibility Grade: The A–F Score of the Finished Study

E

ETP (External Transfer Pricing): The Inbound Investment Pricing Economic Analysis: The TP Study’s Analytical Core ETR (Effective Tax Rate): The Jurisdictional Ratio Behind the Top-Up Evidence Ledger: The Immutable Record of the Study’s Evidence Extraordinary Events: The One-Off Items That Distort the Benchmark Exit Charge: The IP Price When a Participant Leaves

F

Functional Analysis (FAR): Functions, Assets and Risks Explained Form 3CEB: The Chartered Accountant’s Report on the TP Documentation Form 3CEBA: The Constituent Entity’s CbCR Statement FAR Affinity: The Tested Party’s Characterization Signal

G

GMM (Gross Margin Method): Definition and the India Fit GloBE: The Global Anti-Base Erosion Rules Ground-Truth Registry: The AI Reason’s Outcome Record Guarantee Fee: Pricing the Intra-Group Credit Support

I

Interquartile Range (IQR): The OECD Arm's Length Range ITAT (Income Tax Appellate Tribunal): The TP Appeal Forum Intercompany Agreement: The Paper Behind the Transfer Price IIR (Income Inclusion Rule): The Parent’s Top-Up Charge Industry Classification: NIC, NACE and the Search’s First Filter

K

KPO (Knowledge Process Outsourcing): Definition and TP Profile

L

Local File (Rule 10D): Definition, Triggers and Contents Limited-Risk Distributor: The Routine FAR Profile (LRD)LVAS: Low Value Adding Services and Their Safe-Harbour Treatment Location Savings: The Profit Shift from Moving Functions

M

Master File (Rule 10DA): Definition, Triggers and Contents MAA: Mark-to-Market Documentation for Intercompany Loans Median: The Mid-Point of the Comparables Distribution Multi-Year Averaging: The 1-Year vs 3-Year Data Choice MTT (Minimum Top-Up Tax): The Pillar Two Charge, Abbreviated MAP: The Mutual Agreement Procedure for Double Tax Relief

N

NIC Code: The Indian Industry Classification for Benchmarking Searches Net Cost Plus: The Depreciation-Excluded Cost PLI

O

Operating Margin (OM): Definition and Uses in TNMM OPM (Operating Profit Margin): Definition and the TPO’s Adjusted OP OP/OC (Operating Profit to Operating Costs): Definition and Uses OP/S (Operating Profit to Sales): Definition and Uses Outlier: The Comparables Value Outside the Distribution’s Logic

P

Profit Level Indicator (PLI): Definition and Common Types Profit Split Method: Definition, Variants and When It Applies Percentile: The Position in the Comparables Distribution Penalty Protection: Blocking the TP Penalty with the Documentation Permanent Establishment (PE): The Taxable Presence Pillar Two: The 15% Global Minimum Tax at a Glance

Q

QDMTT: The Domestic Minimum Top-Up Tax

R

Related Party: Definition and Ownership Tests (India and OECD)Routine Return: What It Is and Why It Drives Benchmarking Rule 10D: Local File Requirements Under India's TP Rules Rule 10AA: The Intra-Group Services Safe Harbour in India Rule 10AB: The KPO and ITeS Safe Harbour in India ROA (Return on Assets): Definition and Uses in TNMM ROCE (Return on Capital Employed): Definition and Uses ROOA (Return on Operating Assets): Definition and Uses RPM (Resale Price Method): Definition and the Distributor Fit Residual Profit: The Return on the Unique Intangibles Rule 10E: India’s CbCR Rule (Form 3CEB / 3CEBA Reporting)Royalty: The Intangible Use Fee and Its TP Treatment

S

Safe Harbour: Definition, India\'s 10AA/10AB and Limits Section 92 (s.92): India’s Transfer Pricing Provision Statistical Significance: Is the Comparables Set Big Enough?Search String: The Benchmark Query That Finds Comparables Size Filter: The Turnover and Asset Thresholds in Screening Shared Services: The Intra-Group SSC That Needs a Benefit Test SBIE: The Substance-Based Income Exclusion in GloBE

T

Tested Party: Definition, Selection Logic and Documentation TNMM (Transactional Net Margin Method): Definition and PLIs TPO (Transfer Pricing Officer): Powers, Process and Adjustments TDS on Transfer Pricing Payments: Interest, Royalty and Service Fees Thin Capitalisation: The Interest Deduction Cap Two-Sided Adjustment: The Correlative Relief on the TP Adjustment Transfer Pricing Policy: The Company-Wide Framework Top-Up Tax: The 15% Minimum Tax Charge Toll Manufacturing: Processing for the Customer’s Own Materials

U

UTPR (Undertaxed Profits Rule): The Secondary Top-Up Charge

W

Working Capital Adjustment: The Balance-Sheet Normalisation

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Transfer Pricing Basics Methods & PLIs Benchmarking Transactions & Industries Documentation & Compliance Jurisdictions Pillar Two & Global Minimum Tax TP Software & AI Regulation Reference

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Every term above is applied automatically in Quartyl — the method, the PLI, the screens and the adjustments, with a recorded reason for every comparable.