Federico Vincenti and Carola Valente of Valente Associati GEB Partners/Crowe Valente examine year-end transfer pricing adjustments in light of EU developments and implementation of the OIC 34 accounting standard in Italy.

One of the methodologies adopted by multinational enterprises to align the outcomes of their transfer pricing policies with the arm’s-length principle involves the application of specific year-end adjustments –particularly in the context of the transactional net margin method.

This method aims to attribute to the tested party an operating margin consistent with that which would be earned by independent entities operating under comparable market conditions.