Authors:  Z. Varnalii, Dr of Economics, Prof., ORCID ID: 0000-0002-6654-8760,
Taras Shevchenko National University of Kyiv, Kyiv, Ukraine
S. Matsur, PhD Stud., ORCID ID: 0000-0003-1449-4411
Taras Shevchenko National University of Kyiv, Kyiv, Ukraine

Annotation: The article analyzes the statutory requirements for the criteria to select comparable companies in the framework of building the range of
profitability of independent companies, which corresponds to the principle of “arm’s length”. Among the five transfer pricing methods used to analyze
the compliance of controlled transactions with the principle of “arm’s length”, the net profit method is the most popular (except for credit transactions
and transactions involving intangible assets, which are not discussed in this article).

This is a logical result of a gradual overriding of methods depending on the availability of the necessary sources of comparable information because only the net profit method allows the application of external information on the profitability of comparable enterprises, which can be obtained from public sources – usually professional commercial databases. The main challenge in using such databases, however, is to determine the optimal approach to selecting comparable companies, and mainly to build
a robust company selection strategy that simultaneously finds a network of as many comparable companies as possible and meets the requirements
of the tax law. Possible databases that can be used for benchmarking research are identified, and a roadmap for the step-by-step application of the
criteria for selecting comparable companies is proposed. The practical example of the application of the proposed selection criteria and
recommendations on solving typical problems during the analysis, improvement of the selected quality based on the requirements of the Tax Code
of Ukraine and public sources of information are given. The results of this article may be of practical value for enterprises engaged in controlled
transactions and being the objects of transfer pricing in Ukraine.

Keywords: transfer pricing; controlled transactions; databases; benchmark; comparable companies.

Received: 13/06/2022
1st Revision: 21/06/2022
Accepted: 17/07/2022

References (in Latin): Translation / Transliteration/ Transcription
1. Varnaliy Z.S., Matsur S.M. Adjusting the comparability parameters of transactions for purposes of transfer pricing // International
scientific journal “Internauka”. Series: “Economic Sciences”. 2021. №1. P. 78-90.
2. Grib E. Transfer pricing and controlled transactions // Yurydychna Gazeta. 2013. № 37. P. 29.
3. Guk O.V., Grinchuk D.V. Alternative sources of financing of enterprises, Collection of abstracts of the international scientific and
practical conference “The World of Economic Science” № 12, March 19, 2019, p. 8.
4. Dzyuba P., Transfer pricing in the financial system of MNCs: Dissertation Candidate of Economics: 08.05.01. – Moscow, 2005. 210 c.
5. Uniform State Register of Legal Entities, Individual Entrepreneurs and Public Formations:
6. Institute for Strategic Research. Transfer pricing: analitika/item/56-transfert-cen.html
7. OECD Transfer Pricing Guidelines for MNCs and Tax Services (June 22, 2010):
8. Tax Code of Ukraine #2755-V of 27.05.2022 with amendments and additions made according to the Laws #2260-IX and #2261-IX.
9. Romaniuk M. V. Transfer pricing in the tax system of Ukraine // World trends and prospects for the development of the financial system of Ukraine. 2013. P.15-17.
10. Page of the information database “Ruslana”:
11. Page of open data platform Clarity Project:
12. YouControl platform page:
13. On the use of information sources for transfer pricing purposes: letter of the State FSA of Ukraine from 29.10.2015 No. 22908/6/99-
99-19-02-02- 15.: osib/64833.html.
14. Ferguson R.C. Transfer pricing: s electing suitable methods // Journal of General Management. 1981. №55(2). p. 53-57.
15. Greer H.C. Divisional profit calculation: notes on “transfer rate” problems // NAA Bulletin. 1962. 43 (11). p. 5-12.
16. Illicit Financial Flows from Developing Countries: 2000 – 2009: gfip/documents/reports/IFF2010/gfi_iff_update_report-web.pdf.
17. Letzing J. Transfer pricing brings tax troubles to tech bigs: /transfer-pricing-brings-tax-troubles-totech-bigs-2012-04-02?pagenumber=1
18. Watson D.J.H., Baumler J.V. Transfer pricing: a behavioral context // The Accounting Review. 1975. №50(3). p. 466-474.