Commentary

B4.130 Summary of OECD guidelines on arm's length principle

Business tax
Business tax | Commentary

B4.130 Summary of OECD guidelines on arm's length principle

Business tax | Commentary

Determining an arm's length price—OECD guidelines

B4.130 Summary of OECD guidelines on arm's length principle

The basic transfer pricing rule as detailed in B4.121 requires the adjustment of profit or losses where a transaction or series of transactions between affected persons does not follow arm's length standards. The authoritative statement of the arm's length principle is found in the OECD Model Tax Convention on Income and on Capital Article 9 para 1, which states:

'[Where] conditions are made or imposed between … two [associated] enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any

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