03/12/2005
Fuzzy Transfer Pricing World: On the Analysis of Transfer Pricing with Fuzzy Logic Techniques
Tucha Thomas and Brem Markus
Working Papers
The arm's length analysis of international transfer prices of multinational firms lacks sound methodological approach of the so-called function and risk analysis. In practice, such analyses are descriptive. Derived from Zadeh's mathematical theory of fuzzy sets, this paper investigates a quantitative approach to identify the function and risk pattern of related parties of multinational companies. We illustrate our fuzzy logic approach with a simple case.