Arm's Length Price

AFM Definition, Scope & Accounting Standards including Ind AS Free JAIIB Capsule 36 views Updated
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AFM · Definition, Scope & Accounting Standards including Ind AS
In the context of Transfer Pricing, what is the Arm's Length Price and why is it important for tax laws?
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It is the price at which two unrelated and non-desperate parties would agree to a transaction.
It prevents multinational groups from arbitrarily shifting profits to low-tax countries. Methods include Comparable Uncontrolled Price, Cost Plus, etc.
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Arm's Length Price — Full Text

In the context of Transfer Pricing, what is the Arm's Length Price and why is it important for tax laws?

Answer

It is the price at which two unrelated and non-desperate parties would agree to a transaction.

Additional notes

It prevents multinational groups from arbitrarily shifting profits to low-tax countries. Methods include Comparable Uncontrolled Price, Cost Plus, etc.

Part of Accounting & Financial Management for Bankers · Definition, Scope & Accounting Standards including Ind AS · Last updated

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