Run a TNMM test without hiding the judgment
Build a TNMM result bridge for a routine distributor using a defensible PLI and arm's-length range.
Test whether SpainCo, a routine distributor of group products, earned an arm's-length return in FY2025 after reporting 1.6 percent operating margin on third-party sales. TNMM works when the tested party is least complex, the PLI matches the economics, and the comparable set is reliable enough to test net margin. The common trap is to paste the interquartile range into the file without explaining why SpainCo is the tested party, why return on sales is the PLI, or what drove the below-range result. Tested party Choose SpainCo because it performs routine sales and logistics, owns no product IP, and does not…
Sign up free — one personalized lesson every day, matched to your role and goals.
Already have an account? Sign in