A benchmark analysis is a statistical tool intended for determining the arm's length range of the appropriate profit level indicator in the process of constructing a local file of a transfer pricing study. The OECD Transfer pricing guidelines for multinational enterprises and tax administrations define two kinds of methods for determining if transactions between associated enterprises are conducted at arm's length: • Classical transactional methods • Transactional profit methods Transactional profit methods are used in circumstances when it is not possible to directly compare prices calculated in transactions between associated enterprises because either: • Comparable uncontrolled data is not available • Prices are defined as a percentage of profitability/cost In such circumstances, through a benchmark analysis, a statistical processing of data acquired from globally relevant databases, an arm's length interquartile range of profitability that an associated enterprise can attain based off of transactions between associated persons is defined, thus indirectly proving that the observed transactions have been conducted at arm's length, i.e. that there was no shifting of profit outside of the competent tax jurisdiction. This undergraduate thesis shall present a research conducted on a company from the Republic of Croatia, which will define the specific interquartile range, defined as the weighted average of EBIT margins of seven comparable uncontrolled companies, for the observed transaction between the company and its associated enterprises.