Associated enterprises rule allows reallocation of profits to reflect arm's-length conditions, with corresponding tax adjustments by the other jurisdiction.

Permits reallocation and taxation of profits between related enterprises when conditions between them differ from those between independent enterprises, applying the arm's-length principle to attribute profits that would otherwise have accrued. If one jurisdiction taxes such reallocated profits that have been taxed in the other jurisdiction, that other jurisdiction shall make an appropriate adjustment to its tax, with due regard to the treaty and consultation between competent authorities.

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