Associated enterprises adjustments reallocate profits where intercompany conditions deviate from arm's length, prompting corresponding tax adjustment.

Where enterprises are associated enterprises through participation in management, control or capital or common ownership, conditions between them that differ from those between independent enterprises may lead to inclusion and taxation of profits that would otherwise have accrued. If one State taxes such adjusted profits already charged in the other State, that other State shall make an appropriate corresponding adjustment, with competent authorities consulting and having regard to other treaty provisions.

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