Associated enterprises rules permit transfer pricing adjustments with reciprocal tax relief by the other Contracting State. Article 9 requires that transactions between enterprises related by management, control or capital be measured against conditions which independent enterprises would make; if differing conditions cause profits to be diverted, those profits may be included in the taxable profits of the affected enterprise and taxed. Where one State taxes such included profits that have also been charged to tax in the other State, that other State shall make an appropriate adjustment, with due regard to the agreement and consultation between the competent authorities.
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 adjustments with reciprocal tax relief by the other Contracting State.
Article 9 requires that transactions between enterprises related by management, control or capital be measured against conditions which independent enterprises would make; if differing conditions cause profits to be diverted, those profits may be included in the taxable profits of the affected enterprise and taxed. Where one State taxes such included profits that have also been charged to tax in the other State, that other State shall make an appropriate adjustment, with due regard to the agreement and consultation between the competent authorities.
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