TaxConnections

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please Type Topic Into Search Bar

What is CAPM and in which set of TP analytics can this model be applied?

Transfer Pricing
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Michael Kalson, PhD
The CAPM is a financial model that predicts the expected return on an asset as a function of changes in the return on the market portfolio and a risk coefficient (“beta”) that measures the degree to which shifts in the market portfolio influence the returns on the particular asset under consideration. It can be useful in determining arm’s length remuneration for intra-group services that reflects the risks borne by the provider(s), and for making any necessary TP adjustments.

For instance, in a recent case involving Motorola, an Indian branch performed advertising, marketing and promotion activities for its parent, and it is alleged that its remuneration was greater than arm’s length. Motorola used the CAPM to quantify the risk to support their case that the risks involved in their activities justify the above-arm's length price they received for their services.
Leave a Comment 43 weeks ago

Meet Leading Tax Advisors

User Photo Peter J. Scalise

Federal Tax Credits & Incentives Practice Leader

New York, NY

User Photo Blake E. Christian

Tax Partner

Long Beach/ Park City, CA

User Photo John L Stancil

Tax Advisor/CEO

Lakeland, FL

User Photo Blake Christian

CEO

Minneapolis, MN

User Photo John R Dundon, II EA

Tax Director

Denver, CO

User Photo William Rogers, CFP, MBA, EA

Rancho Santa Fe, CA

Title

User Photo Monika Miles

President

San Jose, CA

User Photo John Richardson

Tax Lawyer

Toronto, Canada

 

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

INCREASE KNOWLEDGE WITH EVERY ISSUE OF TAXCONNECTIONS

 

Learn from tax advisors, straight to your inbox

Update My Email Address
Contact Us Today