Introduction:
Transfer price provisions have been incorporated into tax laws by various countries in order to reduce tax avoidance by artificial shifting of profits from high tax jurisdiction to low/nil tax jurisdiction. Under these provisions, when an entity enters into any transaction with its AE[1], the tax authorities of such country may deny the price at which such transaction is entered and compute the price of transaction at arm’s length principle.
Read more: Transfer Price Adjustment - Primary and Secondary Adjustment