Associated enterprises rule allows profit reallocation for non-arm's-length conditions and mandates relief by the other State. Associated enterprises rules permit inclusion in taxable profits where related party conditions differ from arm's length terms, allowing a Contracting State to tax profits that would have accrued under independent enterprise conditions. If such profits are taxed by one State, the other State must make an appropriate corresponding adjustment, with competent authorities consulting as necessary and taking the Agreement's provisions into account to prevent double taxation.
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 rule allows profit reallocation for non-arm's-length conditions and mandates relief by the other State.
Associated enterprises rules permit inclusion in taxable profits where related party conditions differ from arm's length terms, allowing a Contracting State to tax profits that would have accrued under independent enterprise conditions. If such profits are taxed by one State, the other State must make an appropriate corresponding adjustment, with competent authorities consulting as necessary and taking the Agreement's provisions into account to prevent double taxation.
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