ECONOMICS

Detailed explanation-1: -These are attributes of the transactions or parties that could materially affect prices or profits, including the characteristics of the property or services; functional analysis; contractual terms; economic circumstances and business strategies pursued.

Detailed explanation-2: -In addition to the contextual information on the industry and the overall business of the taxpayer, this analysis is typically structured around the five comparability factors: the characteristics of the property or service; contractual terms; functional analysis; economic circumstances and business strategies.

Detailed explanation-3: -Comparability analysis is an essential step in any transfer pricing analysis in order to gain a correct understanding of the economically significant characteristics of the controlled transaction and of the respective roles of the parties to the controlled transaction.

Detailed explanation-4: -Tax code Section 482 and the Organization for Economic Cooperation and Development (OECD) transfer pricing guidelines provide guidance to conduct comparability analyses and describe five comparability factors.