Associated enterprises rule allows profit adjustments where intercompany conditions differ, triggering corresponding tax adjustments and mutual consultation. Where enterprises of Contracting States are related and intercompany conditions differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the profits of the affected enterprise and taxed accordingly. Article 17 of the MLI requires that when one Contracting State taxes such adjusted profits, the other Contracting State shall make an appropriate adjustment to its tax on those profits, with competent authorities consulting 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.
Associated enterprises rule allows profit adjustments where intercompany conditions differ, triggering corresponding tax adjustments and mutual consultation.
Where enterprises of Contracting States are related and intercompany conditions differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the profits of the affected enterprise and taxed accordingly. Article 17 of the MLI requires that when one Contracting State taxes such adjusted profits, the other Contracting State shall make an appropriate adjustment to its tax on those profits, with competent authorities consulting as necessary.
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