Associated enterprise principle permits profit adjustments to reflect arm's length conditions and allows matching tax corrections. Where enterprises are associated enterprises and conditions between them differ from those between independent enterprises, a contracting state may include in taxable profits amounts that would have accrued absent those non arm's length conditions; conversely, if such profits are included and taxed in one state, the other state may make an appropriate adjustment to the tax charged to avoid 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 enterprise principle permits profit adjustments to reflect arm's length conditions and allows matching tax corrections.
Where enterprises are associated enterprises and conditions between them differ from those between independent enterprises, a contracting state may include in taxable profits amounts that would have accrued absent those non arm's length conditions; conversely, if such profits are included and taxed in one state, the other state may make an appropriate adjustment to the tax charged to avoid double taxation.
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