{"type":"rich","version":"1.0","provider_name":"Transistor","provider_url":"https://transistor.fm","author_name":"Uncontrolled Opinions","title":"Country Risk Premium Adjustment in TNMM","html":"","width":"100%","height":180,"duration":1367,"description":"In this episode of Uncontrolled Opinions, Mikhail and Silvana discuss the country risk premium adjustment when applying a Transactional Net Margin Method (TNMM). This discussion is particularly timely, given the recent emphasis on this adjustment in the OECD's Amount B guidance and its mandatory implementation in Brazil's transfer pricing regulations.\nKey Discussion Points\n\nOECD's Amount B Guidance\nIntroduction to the Data Availability Mechanism (DAM) which provides for a country risk premiums adjustment\nRecognition that entities operating in higher-risk countries may warrant higher returns\nBrazil's Transfer Pricing Regulations\nMandatory application of country risk adjustments when using non-Brazilian comparables in TNMM analyses\nChallenges arising from Brazil's limited local dataset, necessitating broader geographic comparables\nTheoretical and Practical Considerations\nDebate on the appropriateness of employing country risk adjustments to limited-risk entities\nPotential overlap with working capital adjustments and the need for empirical validation\nGeographic Proximity vs Country Risk to Select Comparables\nExploration of selecting comparables based on similar country risk profiles rather than geographic proximity\nDiscussion of research by Thibaut Roques (TP Qube) and others on “Transfer pricing comparables: Preferring a close neighbor over a far-away peer?”  which provides an empirical analysis on the relationship between country risk and return.\n ","thumbnail_url":"https://img.transistorcdn.com/oogPJOJuFoxQZgS7xqTI1nZs4-cuTTCfj9Qu1yLfPHY/rs:fill:0:0:1/w:400/h:400/q:60/mb:500000/aHR0cHM6Ly9pbWct/dXBsb2FkLXByb2R1/Y3Rpb24udHJhbnNp/c3Rvci5mbS85Mzg5/YzY4YmI5ZjBiOGVl/YmNmZGUxMjAzMTk1/ZjM4Yi5wbmc.webp","thumbnail_width":300,"thumbnail_height":300}