Associated enterprise adjustments restore arm's length profit allocation and permit corresponding tax adjustments to avoid double taxation. Article 9 permits a Contracting State to include in an enterprise's taxable profits amounts that would have accrued but for conditions between associated enterprises that deviate from those between independent enterprises, restoring an arm's length allocation. If one State taxes such adjusted profits already taxed in the other State, the other State must make an appropriate corresponding adjustment, with competent authorities consulting each other and considering the Convention's other provisions to coordinate relief and 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 adjustments restore arm's length profit allocation and permit corresponding tax adjustments to avoid double taxation.
Article 9 permits a Contracting State to include in an enterprise's taxable profits amounts that would have accrued but for conditions between associated enterprises that deviate from those between independent enterprises, restoring an arm's length allocation. If one State taxes such adjusted profits already taxed in the other State, the other State must make an appropriate corresponding adjustment, with competent authorities consulting each other and considering the Convention's other provisions to coordinate relief and avoid double taxation.
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