Exam Tips for the ADIT Transfer Pricing Exam

Dec 6




As the ADIT Transfer Pricing exam approaches, it is natural to feel a mix of anticipation and nerves.

However, with the right approach and preparation, you can tackle this challenging paper with confidence.

Here, our experienced tutors offer you guidance on exam technique to help you succeed:

1. Time Management is Crucial
Managing your time effectively in the ADIT Transfer Pricing exam is crucial, making every minute count.

Your exam time is precious - here's how to divide it wisely:
• 15-mark questions: Allocate 25 minutes
• 20-mark questions: Give yourself 36 minutes
• 25-mark questions: Use the full 45 minutes
• Once your time for a question is up, move on

2. Smart Question Selection
Choose your battle order strategically:

• Start with Part C - these theory questions are great confidence builders.
• For Part C, look for questions broken into smaller parts (like 5+5+5 marks), these often allow easier mark accumulation.
• In Part B, you'll likely encounter a choice between business restructuring and permanent establishment questions. Many find the permanent establishment questions, especially the profit attribution section, more straightforward. If you have already studied Principles of International Taxation, you will be on familiar ground discussing the creation and taxation of a PE.
• Leave the case study questions (usually in Part A) for last, as these tend to be the most time-consuming.

3. Case Study Success Strategy
When tackling case studies, remember to:

• Delineate transactions – read the facts in the question carefully to work out what intra-group transactions are taking place, remembering to consider both parties to the transactions.
• Identify and explain appropriate transfer pricing methodologies – talk about why a method may not suitable, as well as why your selected method is appropriate.
• Highlight potential issues, risks and concerns – watch out for entities in high-tax territories with high functionality but low profit margins, and conversely, entities in low-tax jurisdictions with limited functionality but high profits!
• Include detailed functional analysis – a table format works well here, listing the functions, assets and risks each company.

4. Maximise Your Marks
Focus on these high-impact areas:

• Use bullet points liberally - they're examiner-friendly!
• Start each answer with a clear introduction.
• End with a punchy conclusion summarising your key points.

5. Essential Exam Materials
Come prepared with:

• The OECD Transfer Pricing Guidelines and Kees van Raad book are sufficient for most exam needs.
• If you want to bring additional materials like BEPS executive summaries, email the ADIT team in the Chartered Institute of Taxation for permission. Ensure any extra materials are properly bound and presented to the invigilator.
• You can highlight and underline in your guidelines but avoid using sticky notes or tabs.

6. Exam Technique Tips
A few helpful tips and techniques on the day:

• Don't overthink your answers. Examiners are looking for clear, well-structured responses that demonstrate your understanding, not ground-breaking new theories.
• For questions about topics like comparability analysis, focus on explaining its importance in determining arm's length pricing and outline the typical process involved.
• If you're struggling with a question, summarise key points and move on. It's better to attempt all questions than to perfect one at the expense of others.

Final Thought: Stay calm, trust your preparation, and manage your time effectively.

By following these strategies and maintaining a positive mindset, you'll be well-equipped to tackle the ADIT Transfer Pricing exam.

Good Luck!