Arm's length principle: transfer pricing adjustments can reallocate profits and require reciprocal tax adjustments between treaty partners. Article 9 permits inclusion in taxable profits where conditions between associated enterprises differ from those between independent enterprises, applying the arm's length principle. If one State taxes profits included on that basis, the other State must make an appropriate corresponding adjustment, with due regard to the Convention and consultation between the competent authorities as necessary.
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.
Arm's length principle: transfer pricing adjustments can reallocate profits and require reciprocal tax adjustments between treaty partners.
Article 9 permits inclusion in taxable profits where conditions between associated enterprises differ from those between independent enterprises, applying the arm's length principle. If one State taxes profits included on that basis, the other State must make an appropriate corresponding adjustment, with due regard to the Convention and consultation between the competent authorities as necessary.
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