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HMRC internal manual

Oil Taxation Manual

Non-residents working on the UK continental shelf: transfer pricing: determining the transfer price - approved methods

The OECD Guidelines list five methods for arriving at the arm’s length transfer price. These are:

  1. Comparable uncontrolled price method.
  2. Resale price method.
  3. Cost plus method.
  4. Transactional Net Margin (TNM) method.
  5. Profit split method.

There is no priority ranking of these, although if a comparable uncontrolled price can be found this is reckoned to be the most direct approach. Nor are they a matter of free choice: some will be more appropriate in a given situation than others. For consideration of the applicability of these methods to the circumstances of bareboat charters on the UK Continental Shelf, see OT43330+.