Non arm’s length transfer prices. 63. It has long been recognized that profits can be shifted between asso- ciated enterprises through the use of non arm’s length prices and the tax legislation of most countries now include transfer pricing rules that address such cases. These rules are specifically authorized by Article 9 of the United Nations and OECD Model Conventions. This, however, is a complex area, as shown by the extensive guidance produced by the OECD19 as to how these rules should operate. 18See for example, paragraph 5 of Article 30 of the France-United States treaty. 19OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, 1995 (as updated). As at 2012, the United Nations Committee of Experts is producing a manual on the practical aspects of transfer pricing with a focus on the issues faced by developing countries.
Non arm’s length transfer prices. 63. It has long been recognized that profits can be shifted between asso- ciated enterprises through the use of non arm’s length prices and the tax legislation of most countries now include transfer pricing rules that address such cases. These rules are specifically authorized by Article 9 of the United Nations and OECD Model Conventions. This, however, is a complex area, as shown by the extensive guidance produced by the OECD9 as to how these rules should operate.
