Associated enterprises rule: arm's-length profit adjustments permit reallocation and require corresponding tax relief. Article 9 permits reallocation of profits between associated enterprises when conditions between them differ from those between independent enterprises, allowing a State to include in taxable profits amounts that would have accrued under an arm's length standard. If one State taxes such adjusted profits, the other State must make an appropriate adjustment to relieve double taxation, with due regard to the Agreement and consultation between competent authorities where 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.
Article 9 permits reallocation of profits between associated enterprises when conditions between them differ from those between independent enterprises, allowing a State to include in taxable profits amounts that would have accrued under an arm's length standard. If one State taxes such adjusted profits, the other State must make an appropriate adjustment to relieve double taxation, with due regard to the Agreement and consultation between competent authorities where necessary.
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