Simplifying Transfer Pricing through a Risk-Based Approach: A Unilateral Proposal to Reduce Administrative and Compliance Costs

This article proposes a unilateral risk-based approach to simplify transfer pricing compliance and audits while maintaining the arm’s length principle. By introducing standardized risk indicators and a pricing matrix, the framework aims to reduce administrative costs for tax authorities and taxpayers, enhance efficiency, and support international discussions on simplifications in transfer pricing.