Arm's length pricing extended to specified domestic transactions, requiring allowances, interest and cost allocations to reflect arm's length price. The amendment requires that any allowance for expenditure or interest, any allocation of costs or expenses, and any income in relation to a specified domestic transaction shall be computed having regard to the arm's length price, and substitutes references to 'international transaction' with 'international transaction or specified domestic transaction' so that existing arm's length computation and adjustment rules apply equally to specified domestic transactions.