Category: Arm’s Length Principle
The authoritative statement of the arm’s length principle as used in transfer pricing is found in paragraph 1 of Article 9 of the OECD Model Tax Convention, which forms the basis of bilateral tax treaties involving OECD member countries and an increasing number of non-member countries.
Article 9 provides: [Where] conditions are made or imposed between the two [associated] enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
The analysis required to apply the arm’s length principle on controlled transactions is referred to in the transfer pricing guidelines as a comparability analysis. See TPG 1.6.

Italy vs Vincenzo Zucchi Spa, May 2022, Supreme Court, Cases No 13718/2022

Poland vs K.O., February 2022, Supreme Administrative Court, Case No II FSK 1544/20

Poland vs A. Sp. z o. o., February 2022, Supreme Administrative Court, Case No II FSK 1475/19

Belgium, December 2021, Constitutional Court, Case No 184/2021

Poland vs R.B.P. (P.) Sp. z o.o.., August 2021, Supreme Administrative Court, Case No II FSK 3830/18

France vs SA Compagnie Gervais Danone, June 2021, CAA, Case No. 19VE03151

Uganda vs Bondo Tea Estates Ltd. March 2021, Tax Appeals Tribunal, Case no. 65 of 2018

Norway vs New Wave Norway AS, March 2021, Court of Appeal, Case No LB-2020-10664

Indonesia vs PT Nanindah Mutiara Shipyard Ltd, December 2020 Supreme Court, Case No. 4446/B/PK/Pjk/2020

Spain vs JACOBS DOUWE EGBERTS ES, SLU., November 2020, Tribunal Superior de Justicia, Case No STSJ M 7038/2019 – ECLI:EN:TS:2020:3730

Tanzania vs Atlas Copco Tanzania Ltd., August 2020, Court of Appeal, Case No 167 of 2019, TZCA 317

Norway vs A/S Norske Shell, May 2020, Supreme Court, Case No HR-2020-1130-A

Bulgaria vs “Beltart Manufacturing”, May 2020, Supreme Administrative Court, Case No 5756

India vs Gulbrandsen Chemicals Ltd., February 2020, High Court, Case No 751 of 2019

Poland vs A. Sp. z o.o., March 2019, Administrative Court, Case No I SA/Rz 1178/18

European Commission vs Belgium and Ireland, February 2019, General Court Case No 62016TJ0131

India vs. L.G. Electronic India Pvt. Ltd., January 2019, TAX APPELLATE TRIBUNAL, Case No. ITA No. 6253/DEL/2012

Denmark vs Water Utility Companies, November 2018, Danish Supreme Court, Case No SKM2018.627.HR and SKM2018.635.HR

Malawi vs Eastern Produce Malawi Ltd, July 2018, Malawi High Court, JRN 43 af 2016
