Associated enterprises: transfer pricing adjustments permit inclusion of misallocated profits and require corresponding cross border tax adjustment. Where enterprises of the Contracting States are related and conditions between them differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the taxable profits of the affected enterprise. If such included profits are taxed in one State and also charged to tax in the other State, the latter State shall make an appropriate corresponding adjustment, with the competent authorities consulting each other 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: transfer pricing adjustments permit inclusion of misallocated profits and require corresponding cross border tax adjustment.
Where enterprises of the Contracting States are related and conditions between them differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the taxable profits of the affected enterprise. If such included profits are taxed in one State and also charged to tax in the other State, the latter State shall make an appropriate corresponding adjustment, with the competent authorities consulting each other as necessary.
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