Description of the method: the cost plus method (previously: the reasonable margin method) consists in determining the sale price of goods and rights and the provision of services in the transaction of a given entity with a related entity at the level of the sum of the cost base and profit mark-up, comparable to the cost base and profit mark-up determined between entities independent functions that take into account comparable functions, risks incurred and assets involved.

The cost base in this method is understood as the sum of costs directly or indirectly related to the production on one’s own or the acquisition of the subject of a controlled transaction (regulations until December 31, 2021 forced the exclusion of general management costs, i.e. unit management costs, from the cost base). . In this method, the profit mark-up is calculated based on the cost base. The profit mark-up in relation to a specific cost base is determined by reference to the level of profit that the same entity uses in comparable transactions with independent entities (internal comparison), or the profit used in comparable transactions by independent entities (external comparison).  

To calculate the transfer price (sale price to a related entity) based
on the “cost plus” method, you need to identify:

  • costs incurred in connection with the controlled transaction,
  • profitability (measured by the mark-up on costs) of the uncontrolled transaction.

Comparability of transactions: required by the provisions of Chapter 2 Study of the comparability of transactions in connection with Chapter 3 Methods of price verification of the Regulation of the Minister of Finance of December 21, 2018 on transfer pricing in the field of corporate income tax.

Mathematical formula:   CT = (KB + KP) * (1 + n)


CT – transfer price
KB – direct costs related to the subject of the transaction
KP – indirect costs (until December 31, 2018 – excluding general and administrative costs) assigned to the subject of the transaction thanks to allocation keys
n – profit mark-up