The cost plus method is described by the OECD Transfer Pricing Guidelines as one of the traditional transaction methods, and is discussed at paragraphs 2.39 – 2.55.

The Guidelines say at paragraph 2.39 that the cost plus method is most useful where semi-finished goods are transferred between related parties (e.g. a manufacturing company selling to a distribution affiliate), where joint facility agreements have been concluded, or where the controlled transaction is the provision of services.

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