Associated enterprises rules permit transfer-pricing profit reallocations, with corresponding adjustments to prevent double taxation through competent authority consultation. Article 10 treats enterprises as associated where one participates in the management, control or capital of an enterprise in the other Contracting State, or where the same persons participate in both, and permits reallocation of profits that would have accrued but for non-arm's-length conditions so they may be taxed accordingly. Paragraph 1 of MLI Article 17 requires corresponding adjustments: when one State taxes profits included on an arm's-length basis that reduce profits in the other State, that other State shall make an appropriate adjustment, with due regard to the Convention and after competent authority consultation.
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 rules permit transfer-pricing profit reallocations, with corresponding adjustments to prevent double taxation through competent authority consultation.
Article 10 treats enterprises as associated where one participates in the management, control or capital of an enterprise in the other Contracting State, or where the same persons participate in both, and permits reallocation of profits that would have accrued but for non-arm's-length conditions so they may be taxed accordingly. Paragraph 1 of MLI Article 17 requires corresponding adjustments: when one State taxes profits included on an arm's-length basis that reduce profits in the other State, that other State shall make an appropriate adjustment, with due regard to the Convention and after competent authority consultation.
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