The Use of the Profit Split Method in Highly Integrated Transactions

Given the increased significance of the transactional profit split method, the author provides a critical analysis of this transfer pricing method related to highly integrated transactions within multinational enterprises in light of the recently published discussion drafts on profit splits by the OECD. Particularly, this article addresses different aspects of these discussion drafts and gives a real-life example of a profit split in the construction industry in the context of highly integrated transactions.