{"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.Key Discussion PointsOECD's Amount B GuidanceIntroduction to the Data Availability Mechanism (DAM) which provides for a country risk premiums adjustmentRecognition that entities operating in higher-risk countries may warrant higher returnsBrazil's Transfer Pricing RegulationsMandatory application of country risk adjustments when using non-Brazilian comparables in TNMM analysesChallenges arising from Brazil's limited local dataset, necessitating broader geographic comparablesTheoretical and Practical ConsiderationsDebate on the appropriateness of employing country risk adjustments to limited-risk entitiesPotential overlap with working capital adjustments and the need for empirical validationGeographic Proximity vs Country Risk to Select ComparablesExploration of selecting comparables based on similar country risk profiles rather than geographic proximityDiscussion 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. ","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}