The Profit Split Method (PSM) is gaining prominence in transfer pricing to ensure fair profit allocation among multinational enterprises. Learn when to apply the PSM based on unique and valuable contributions, highly integrated operations, or shared economically significant risks between controlled parties. Discover how the PSM aligns with the OECD’s BEPS initiative by considering the relative value contributed by each party to the transaction. Explore the origins, strengths, and practical applications of PSM. This article provides insights on using the PSM for arm’s-length pricing, tax planning, and defending against transfer pricing examinations. Continue reading →