Associated enterprises transfer pricing: adjustments reallocate profits and require mutual correction to prevent double taxation. Article 9 permits reallocation of profits when conditions between enterprises under common control differ from those between independent enterprises, allowing a Contracting State to include in taxable profits amounts that would have accrued absent such conditions, applying the arm's length principle. If such reallocation results in double taxation because the other State has already taxed those profits, the other State must make an appropriate adjustment after consultation between competent authorities, taking account of the Agreement's provisions.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Associated enterprises transfer pricing: adjustments reallocate profits and require mutual correction to prevent double taxation.
Article 9 permits reallocation of profits when conditions between enterprises under common control differ from those between independent enterprises, allowing a Contracting State to include in taxable profits amounts that would have accrued absent such conditions, applying the arm's length principle. If such reallocation results in double taxation because the other State has already taxed those profits, the other State must make an appropriate adjustment after consultation between competent authorities, taking account of the Agreement's provisions.
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