On July 30^th, 2012, the Independent Finance Board (unabhängiger Finanzsenat – UFS) rendered a widely awaited decision in a transfer pricing case in which an Austrian subsidiary of a German parent company had used data bank studies to support the arm’s length standard of its contractual arrangements with other group companies. The subsidiary acted as a limited risk distributor of consumer goods manufactured within the group. The manufacturers delivered their products to the Austrian company at standard inventory cost predetermined for each year. Should the Austrian sales company fail to achieve a profit margin between 1,20 % and 1,58 % (EBT) of its net turnover in a given year, a price reduction of up to 10 % of the manufacturers’ production costs would be granted. The UFS, on the one hand, accepted a very broad transfer pricing range of 0,03 % to 7,1 % (EBIT), based on a data bank study of the taxpayer. Such a large spread was accepted because the UFS disallowed an inter-quartile diminution of the range on the grounds that only six companies in the tested sample stayed within that range. On the other hand, the UFS followed the opinion of the tax administration that in those years i...