TPguidelines

The application of the arm’s length principle to the prices charged within MNEs is based on the assumption that prices are determined on the markets in the different countries by ordinary market forces. There may, however, be factors of various kinds, as discussed in the rest of this Section and, more generally, in Chapter I, which modify the operation of the normal rules of a market economy. Each of these factors is considered separately, but it can be expected generally that they would all have a similar effect on sales between unrelated enterprises in similar conditions and tax authorities should take this into account when considering adjustment of transfer prices.