Benchmarking Analysis
Identifying genuinely comparable transactions or companies to test whether your related-party pricing is at arm's length.
Benchmarking analysis involves searching recognised databases for comparable uncontrolled transactions or companies, applying qualitative and quantitative filters to arrive at a defensible comparable set, and computing the arm's length margin or price range. The reliability of your entire transfer pricing position depends heavily on how rigorously the comparables are selected and how well the search process is documented for scrutiny.
What benchmarking analysis involves
A defensible benchmarking exercise is as much about the search process and filters as it is about the final margin.
- Defining search criteria aligned with the FAR analysis and tested party
- Running database searches across recognised commercial databases
- Applying qualitative filters to exclude functionally dissimilar entities
- Applying quantitative filters (related-party sales, persistent losses, etc.)
- Computing the arm's length range or point estimate
- Documenting the full search process for audit trail purposes
What this service includes
How we run your benchmarking exercise.
Database Search
Running structured searches on recognised databases to identify potential comparables.
Filter Application
Applying qualitative and quantitative filters to refine the comparable set.
Margin Computation
Calculating the arm's length range or point using accepted profit level indicators.
Search Documentation
Recording every filter and rejection reason to support the process if questioned.
Our process
From initial consultation to completion.
Search Strategy Design
Setting search parameters based on industry, geography and functional profile.
Database Search & Filtering
Running the search and applying qualitative and quantitative filters.
Comparable Finalisation
Arriving at a defensible set of comparable companies or transactions.
Margin & Range Computation
Calculating the arm's length outcome and comparing it to your actual results.
Why the search process matters as much as the result
What sets our approach apart.
Filters need to be justifiable, not just applied
Every exclusion — related-party sales, persistent losses, diminishing revenue — needs a documented, defensible reason.
A too-narrow or too-broad set both raise questions
Getting the comparable set size and composition right is a judgment call that authorities frequently probe.
Outcomes can shift materially with small filter changes
Small changes in filters can move the arm's length range meaningfully, so sensitivity needs to be understood upfront.
Benchmarking analysis questions answered
What people ask before engaging us.
Get a defensible benchmarking analysis in place.
Let our team help you navigate this process with clarity and confidence.
