These Guidelines are also intended primarily to govern the resolution of transfer pricing cases in mutual agreement proceedings between OECD member countries and, where appropriate, arbitration proceedings. They further provide guidance when a corresponding adjustment request has been made. The Commentary on paragraph 2 of Article 9 of the OECD Model Tax Convention makes clear that the State from which a corresponding adjustment is requested should comply with the request only if that State “considers that the figure of adjusted profits correctly reflects what the profits would have been if the transactions had been at arm’s length”. This means that in competent authority proceedings the State that has proposed the primary adjustment bears the burden of demonstrating to the other State that the adjustment “is justified both in principle and as regards the amount.” Both competent authorities are expected to take a cooperative approach in resolving mutual agreement cases.
TPG2017 Preface paragraph 17
Category: OECD Transfer Pricing Guidelines (2017), TPG2017 Preface | Tag: Corresponding adjustment, Mutual agreement procedure (MAP)
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Next » Related Guidelines
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Related Case Law
- Denmark vs “Fashion Seller A/S”, November 2021, High Court, Case No SKM2021.582.OLRIn order to avoid double taxation, “Fashion Distributor A/S” had requested the Danish Tax Authorities, in parallel to the review of a transfer pricing assessment, to conduct a mutual agreement procedure under Article 6 of the EC Arbitration Convention 1990. The Danish Tax...
- Canada vs Sifto Canada Corp, March 2017, Tax Court, Case No TCC 37The issue before the court was whether the Canadian revenue service had the ability to issue the second reassessments given the Canadian and US competent authorities subsequently agreed on a MAP settelment. The Tax Court found that a settlement agreed to via the...
- Spain vs EPSON IBÉRICA S.A.U., March 2021, Supreme Court, Case No 390:2021The SEIKO EPSON CORPORATION is a multinational group of Japanese origin active in among others areas, production and sale of computer products. The group is present in Spain, EPSON IBÉRICA, but has its European HQ in the Netherlands, EPSON EUROPE BV. The main...