Associated enterprises rules adjust taxable profits when related-party conditions deviate from arm's length terms, prompting tax adjustments. Where associated enterprises impose conditions differing from those between independent enterprises, profits that would have accrued but for those ... Summary
Associated enterprises rules adjust taxable profits when related-party conditions deviate from arm's length terms, prompting tax adjustments.
Where associated enterprises impose conditions differing from those between independent enterprises, profits that would have accrued but for those conditions may be included in the affected enterprise's taxable income and taxed accordingly; domestic discretionary determinations must be applied consistently with this principle, and where one State taxes adjusted profits also taxed in the other State, the other State shall make an appropriate adjustment after competent authority consultation.
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