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Avalara Supported Intercompany Transactions

# Intercompany Transaction Type Transfer Pricing Model Transaction Type Description Benchmark Range FY 2020 
(1st quartile% - median% - 3rd quartile%)
Benchmark Applied on
America Europe Asia
1 Management services Cost Plus Management services include activities, such as strategic management and involvement of the board of directors and leadership. 8.3% - 10.9% - 13.5% 7.7% - 10.7% - 19.6% 5.8% - 12.4% - 21.6% Service provider's mark-up on costs
2 Administration services Cost Plus Administration services include activities, such as HR, finance, accounting, tax, IT, and legal. 3.4% - 4.7% - 6.0% 1.6% - 5.7% - 11.6% 2.5% - 6.7% - 9.5% Service provider's mark-up on costs
3 Combined management & admin services (HQ services) Cost Plus Combined management and administration services include activities by the headquarters, partly or completely. 4.7% - 6.6% - 10.6% 3.4% - 9.2% - 16.4% 2.9% - 8.3% - 15.6% Service provider's mark-up on costs
4 Marketing services Cost Plus Marketing services include activities, such as pre-sale, advertising, PR, branding, market research, and lead generation. Sales activities are excluded.  3.6% - 6.6% - 15.6% 2.9% - 9.1% - 12.5% 4.4% - 8.3%- 11.8% Service provider's mark-up on costs
5 Software R&D services  Cost Plus R&D services (software) include activities, such as software development, bug fixing, product management, QA, UX, and software architecture.  5.4% - 7.4% - 9.3% 3.1% - 7.9% - 10.1%   Service provider's mark-up on costs
6 Logistic services Cost Plus Logistic services include activities, such as shipping, warehouse, inventory management, shipping, procurement, and packaging.  3.5% - 7.8% - 10.4% 4.0% - 6.4% - 8.4% 2.6% - 4.2% - 7.3% Service provider's mark-up on costs
7 Customer support services Cost Plus Call center services include activities, such as post-sale, customer care, and tier-one support.  2.4% - 4.4% - 7.3% 3.0% - 6.2% - 9.9% 0.7% - 5.0% - 8.9% Service provider's mark-up on costs
8 Laboratory services Cost Plus Laboratory services include activities, such as medical testing and diagnostic.  5.3% - 15.2% - 18% 11.7% - 16.7% - 21.9%   Service provider's mark-up on costs
9

Manufacturing services (HVAC and large kitchen appliances)

Cost Plus HVAC contract manufacturer services include activities, such as manufacturing of HVAC or similar products.  6.4% - 11.4% - 14.9% 6.0%  - 6.3% - 12.1%   Service provider's mark-up on costs
10 Product and civil engineering services Cost Plus Product engineering services include activities, such as electronic and industrial products design, digital transformation, and manufacturing-related engineering services.   2.2% - 3.8% - 5.2%   Service provider's mark-up on costs
11 Manufacturing services (Motor parts) Cost Plus Manufacturing services of automobile components and related accessories. 4.7%-6.6%-10.1%     Service provider's mark-up on costs
12 Manufacturing services (Electronics) Cost Plus Manufacturing services of electronic components, finished electronics goods, and OEM.   5.1%-5.7%-10.3%   3.0% - 7.0% - 12.9% Service provider's mark-up on costs
13 Commercial printing Cost Plus Commercial printing services include activities, such as paper printing, catalogs, magazines, shrink sleeve labeling, and packaging.  4% - 4.2% - 11.1%     Service provider's mark-up on costs
14 Wholesale of groceries and pharmacies related goods Low-Rsk Distributor Reseller entities are engaged in the wholesale of paper products, office supply, books, toys, gifts, stationery, and kitchen appliances. 0.8 %- 1.1% - 1.4% 2.1%-3.9%-5.9% 1.1% - 1.4% - 3.5% Resller's operarting profit margin
15 Wholesale of  industrial products and equipments  Low-Rsk Distributor

Reseller entities are engaged in the wholesale of machinery, industrial equipment, power generators, electronic parts, electrical products.

These entities may provide technical support for the customers. 

2.9%-4.8%-7.3% 0.7% - 1.1% - 4.9% 3.2% - 3.7% - 4% Resller's operarting profit margin
16 Software resale  Low-Rsk Distributor Reseller entities are engaged in the resale of software products, solutions, SaaS based subscriptions, and minor hardware. 1.6% - 2.4% - 3.5% 1.8% - 2.3% - 2.7% 3.2% - 4.9% - 5.5% Resller's operarting profit margin
17 Software license royalties Royalty (CUP) Royalties for the use of intellectual property including know-how, algorithms, and formulas, whether or not the technology is patented.  7% - 12.5% - 25%  7% - 12.5% - 25%  7% - 12.5% - 25%  Licensor's sales

 

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