[Verse 1] When companies trade across their borders Sister firms and parent-child orders Section four-eight-two demands the test Would strangers deal at these prices best? The arm's length standard holds the key Uncontrolled parties, what would they agree? [Chorus] CUP and resale, cost plus too Profit split and CPM will do Five methods strong to find the price Documentation pays, penalties slice Transfer pricing keeps it fair Arm's length dealings everywhere [Verse 2] Comparable Uncontrolled Price leads the way Find similar deals that third parties pay Resale method takes the selling price Minus markup for a calculated slice Cost plus adds profit to the base While profit split shares the earning space [Chorus] CUP and resale, cost plus too Profit split and CPM will do Five methods strong to find the price Documentation pays, penalties slice Transfer pricing keeps it fair Arm's length dealings everywhere [Bridge] Section sixty-six-sixty-two subsection e Penalties bite at twenty percent fee Documentation shields you from the pain Substantial compliance breaks the chain APAs negotiate the future road Competent authorities share the load [Verse 3] Advance Pricing Agreements pave tomorrow Certainty purchased, reducing sorrow Competent authority procedures reign When treaties help resolve the strain Between the nations, conflicts cease Mutual agreement brings the peace [Chorus] CUP and resale, cost plus too Profit split and CPM will do Five methods strong to find the price Documentation pays, penalties slice Transfer pricing keeps it fair Arm's length dealings everywhere [Outro] Comparable Profit Method rounds it out Best method rule removes all doubt Document well or pay the cost In transfer pricing, nothing's lost When arm's length standard lights the way
← 3 Taxation of Foreign Persons with U.S. Activities | 5 Tax Treaties →