New Transfer Pricing brochure on the residual profit split method

Multinational enterprises more and more opt for transfer pricing methods such as the Profit Split Method using a residual analysis (RPSM). In the context of cross-border transfer pricing and the ongoing digitalisation process emphasis is placed on platform concepts.

So far, the application of the residual profit split method has been rare and rather unusual in Central Europe, but especially in Germany. However, it offers some advantages as a solution approach: On the one hand, it takes into account current developments at the OECD level (so-called DEMPE approach and hard-to-value intangibles). On the other hand, as a testing model, this method offers the advantage that incentive structures, especially for management and senior executives, do not necessarily have to be adapted due to existing contracts.

Due to the emergence of new business models, it is to be assumed that the residual profit split method is going to be applied more often in the future.

The residual profit split method and its new acceptance in Europe related to platform concepts