The benchmark or comparability / market study (along with the Economic Analysis of which it is a part) is the most important section of the transfer pricing file and a basic component in the transfer pricing policy or risk assessment associated with transfer pricing.

The preparation of the comparability study involves the comparison of prices or net or gross profitability margins (or other economic – financial indicators) calculated at the level of the analyzed / tested company with those calculated at the level of independent comparable companies.

Identifying the comparable independent companies must first of all be carried out at the local level (according to Order 442/2016). If no independent local comparables are identified, then the comparability study must be extended to the European Union market, subsequently to the pan-European market, and if no comparables are identified in the pan-European market either, the study will be extended to the global market.

Once we have the final set of independent comparables, we can determine the comparability range or market range. It will be divided into 4 segments, and the high and low segments will be removed, so the market range is the set of values ​​between quartile 1 and quartile 3 of the interquartile range.

Benchmarking is particularly important in transfer pricing compliance work, as it is (first and foremost) a means of internal verification. Thus, if the analyzed / tested company’s indicators do not fall within the market range, then the company can proceed to voluntary adjustment or correct the result for the future, thus reducing the risks of adjustment by tax inspectors.