Article 9(1) of the MC states the ALP that is applicable to commercial and financial relations between
associated enterprises and sets the ALP as the allocation norm. Thus, in situations, where the prices
charged in transactions between associated enterprises differ from the prices (arm’s-length prices) that would be charged in similar or comparable transactions between unrelated or independent enterprises, profits can be adjusted to reflect the true profits that would have been earned if the transactions had taken place at arm’s length.
The views in all sections are personal views of the author.