Associated enterprises and arm's length adjustments ensure transfer pricing adjustments and corresponding tax relief across jurisdictions. Associated enterprises are those linked by direct or indirect participation in management, control or capital, or by common persons participating in both enterprises. Where conditions between such enterprises differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the taxable profits of an enterprise and taxed accordingly to reflect the arm's length principle. If one State taxes such adjusted profits already charged in the other State, that other State shall make an appropriate corresponding adjustment after consultation of 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 and arm's length adjustments ensure transfer pricing adjustments and corresponding tax relief across jurisdictions.
Associated enterprises are those linked by direct or indirect participation in management, control or capital, or by common persons participating in both enterprises. Where conditions between such enterprises differ from those between independent enterprises, profits that would have accrued but for those conditions may be included in the taxable profits of an enterprise and taxed accordingly to reflect the arm's length principle. If one State taxes such adjusted profits already charged in the other State, that other State shall make an appropriate corresponding adjustment after consultation of competent authorities.
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