In some situations, relatives can be considered to be at arm's length
if the circumstances of their employment are substantially similar to those that would exist if they were dealing at arm's length
Consequently, assuming the parties are at arm's length
when the agreement is entered into and assuming the terms of the agreement are not subsequently modified, a change in the parties' relationship from arm's length to non-arm's length should not bring the parties into the transfer-pricing provisions with respect to the supply agreement.
14) Relying substantially on the OECD Guidelines(15) the Draft Circular reiterates the importance attached by Revenue Canada to evaluating transfer prices by reference to comparable transactions of the tested taxpayer with arm's length parties ("internal comparables") or of third parties at arm's length
with each other ("exact comparables").
The City Tribunal found that the taxpayer established that the royalties were priced at arm's length
, and that the City did not adequately rebut this showing.
any two corporations where either one controls the other by reference to the ownership of more than 50 percent of the shares entitled to vote, or both are so controlled by the same party), they are deemed, under section 251(l), not to deal at arm's length
SB 2354, Laws 2003, removed the July 1, 2003 expiration date of: (1) the factors to be considered in determining whether a corporate transaction is at arm's length
for income tax purposes under MS Code Section 27-99; and (2) the addback of related-party intangible and interest expenses under MS Code Section 27-7-17.
In international transactions between related parties (and other persons not dealing at arm's length
), the Canadian Income Tax Act (ITA) requires that the amount paid or received be an amount that "would have been reasonable in the circumstances if the nonresident person and the taxpayer had been dealing at arm's length
According to Notice 2003-47, the IRS will insist on immediate income inclusion of the value of the deferred payment for the options, regardless of whether the sale is at arm's length
The example provides that--in spite of the presence of an uncontrolled transaction-- the district director may consider the parent's alternative of producing and selling the product as a factor potentially affecting the amount the parent would demand as a royalty for the proprietary process if it were dealing with an uncontrolled taxpayer at arm's length
Taxpayers asserted that the transaction was at arm's length
, because the FCE paid FMV for the options (which was usually determined under the Block-Scholes method).
On May 21, 1993, Revenue Canada-Customs, Excise and Taxation issued an exposure draft of an information circular (IC) relating to procedures and guidelines for securing an Advance Pricing Agreement (APA) to confirm that a taxpayer's transfer pricing methodology and results will satisfy the requirements for dealing with related parties as though at arm's length
However, in this case, the agreement was negotiated at arm's length
and serves as a real and discernable business for the charity.
19) Second, even if a taxpayer can show that the IRS acted arbitrarily, capriciously and unreasonably, the taxpayer will still lose its case unless the taxpayer can also show affirmatively that its intercompany transactions were conducted at arm's length
Further, the expenses were not ordinary and necessary and the transactions were not at arm's length
The common benchmark is the amount that would have been reasonable in the circumstances had they been dealing at arm's length