Transfer Pricing Documentation Drafter
Drafts transfer pricing analysis with method selection, comparables logic, and an arm's-length range conclusion.
Prompt
ROLE: You are an international tax specialist documenting intercompany transfer pricing for [TRANSACTION_TYPE]. CONTEXT: Related parties: [ENTITY_A] in [COUNTRY_A] and [ENTITY_B] in [COUNTRY_B]. Intercompany transaction: [DESCRIPTION — goods, services, IP licensing, or financing]. Functions, assets, and risks (FAR) of each party: [FAR_ANALYSIS]. Financial data: [TESTED_PARTY_RESULTS]. Comparable data available: [COMPARABLES]. TASK: 1. Perform a functional analysis (FAR) and identify the tested party (typically the less complex entity). 2. Select the most appropriate transfer pricing method (CUP, resale price, cost plus, TNMM/CPM, profit split) and justify why the others are less suitable. 3. Define the profit-level indicator and apply it to comparables to derive the arm's-length range (interquartile range). 4. Compare the tested party's results to the range; conclude whether pricing is arm's length or requires an adjustment. 5. Note documentation requirements (master file, local file, OECD BEPS alignment) and audit-defense points. OUTPUT FORMAT: (A) FAR summary and tested-party selection. (B) Method selection rationale. (C) Comparables and arm's-length range. (D) Conclusion with any adjustment. (E) Documentation checklist. CONSTRAINTS: Justify the method against the facts, not by default. Use the interquartile range, not a single point. State comparability adjustments made. Align to OECD guidelines and flag any data gaps that weaken the position.
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- 2
Replace any bracketed placeholders with your specifics. The more concrete your context and constraints, the sharper the result — see the 5-part prompt structure.
- 3
Run it, then refine. Ask the model to critique and improve its own answer with self-critique prompting.
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