Arm's length principle: transfer pricing adjustments may be included in taxable profits, triggering corresponding tax adjustments by other State.

Associated enterprises rules apply the arm's length principle when related enterprises' commercial or financial conditions differ from those between independent enterprises; profits that would have accrued but for those conditions may be included in taxable profits and taxed. If one State taxes such adjusted profits already charged in the other State, that other State shall make an appropriate corresponding tax adjustment, with due regard to the Convention and consultation between competent authorities.

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