The Tax Court applied an unspecified method in its transfer pricing analysis to determine the royalty rates for license agreements between Medtronic US and its Puerto Rican subsidiary. The Tax Court rejected the IRS’s use of the Comparable Profits Method (CPM) and Medtronic US’s application of the comparable uncontrolled transaction (CUT) method. The Tax Court’s opinion in Medtronic III provides guidance for future related-party transactions.On 18 August 2022, the United States (US) Tax Court issued its second opinion in Medtronic, Inc. and Consolidated Subsidiaries v. Commissioner (Medtronic III).1 In this opinion, the Tax Court rejected the principal transfer pricing analysis of both the...