This study analyses the existing transfer pricing methods and their encapsulated tendency to rely on the so-called “deemed arm’s length approach”. It puts the spotlight on the fact that most of these methods already rely, to different levels, on formulae and approximations to reach a deemed arm’s length price. The author proposes an alternative transfer pricing methodology intended to overcome existing challenges, including for developing countries. Avoiding the unitary approach and all its controversies, the proposal maintains the integrity of the separate entity approach that has become the political decision predominantly taken by countries with regard to transfer pricing rules. The author maintains that such an alternative solution would be able to cope with the separate entity approach and the arm’s length standard, as well as with urgent demands such as dispute prevention (anticipating the necessity of dispute resolution), accuracy, transparency, certainty and compliance costs, avoiding double taxation, strengthening defence and countering base erosion and profit shifting. The author considers the opportunity costs for the relevant countries and the private sector and assumes that a simpler, less costly and more reasonable transfer pricing system would attract foreign investment. The proposal deals with measures to make predetermined margin methods accurate at the national and international levels, including issues such as the extension of the predetermined margins list, the periodic update and improvement of the list of fixed margins, the collection of information regarding the settlement of the margins of profitability, the possible collaborative participation of the private sector in the fixed margin-making process and mechanisms to clarify and review the fixed margins. Finally, it proposes that the OECD, along with the United Nations, should make the necessary efforts to build a workable, worldwide network of countries making use of this simpler, less costly and more reasonable transfer pricing alternative.