The Arm's Length Comparable in Transfer Pricing: A Search for an 'Actual' or a 'Hypothetical' Transaction?

World Tax Journal, Vol 7, Issue 3.

Posted: 13 Aug 2015

Date Written: July 24, 2015

Abstract

When searching for an arm’s length comparable in the transfer pricing analysis, does the analysis require (or allow) searching for a transaction that actually took place in the market, or can/should the internal data of the controlled transaction simply be imputed to form a hypothetical uncontrolled transaction in which the parties are assumed to be operating at arm’s length but otherwise dealing under the same circumstances? This article sheds light on this question, based on lessons distilled from recent Canadian jurisprudence; particularly, the case Canada v. GlaxoSmithKline Inc. The author calls on Canada’s courts to reconsider their approach to this issue, and alerts courts in other jurisdictions to avoid transplanting the Canadian approach because otherwise they would risk repeating the same mistake(s).

Keywords: Law, International Tax, Transfer Pricing

JEL Classification: H20, H25, H26, H29, K33, K34

Suggested Citation

Pichhadze, Amir, The Arm's Length Comparable in Transfer Pricing: A Search for an 'Actual' or a 'Hypothetical' Transaction? (July 24, 2015). World Tax Journal, Vol 7, Issue 3., Available at SSRN: https://ssrn.com/abstract=2642902

Amir Pichhadze (Contact Author)

University of Oxford ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
938
PlumX Metrics