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.

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

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

Poland vs “Blueberry Factory” Sp z.o.o., June 2018, Supreme Administrative Court, II FSK 1665/16

Brazil vs Eli Lilly, April 2018, CARF Case No 1302-002-725F

Norway vs. Exxonmobil Production Norway Inc., January 2018, Lagsmanret no LB-2016-160306

Europe vs Hamamatsu, Dec 2017, European Court of Justice, Case No C-529-16

France vs Office Depot, December 2017, CE, Case No. 387975

Spain vs. Afinsa and Filatelico, Nov. 2017, Supreme Court, Case no 4008/2017

US-vs-Analog-Devices-Subsidiaries-Nov-22-2016-United-State-Tax-Court-147-TC-no-15

Spain vs. CÍTRICOS Y REFRESCANTES, S.A., Oct. 2016

Australia vs. Tech Mahindra Limited, September 2016, Federal Court, Case no. 2016 ATC 20-582

US vs. Boston Scientific Corporation, July 2016

Sweden vs. Nobel Biocare Holding AB, HFD 2016 ref. 45

Netherlands vs X BV, June 2016, Supreme Court, Case No 2016:1031 (14/05100)

France vs Société Lifestand vivre debout, 15 April 2016, CE

Sweden vs. taxpayer april 2016, Swedish Supreme Administrative Court, HFD 2016 ref. 23
