»Ê¹ÚÌåÓýapp

Transaction or series of transactions

»Ê¹ÚÌåÓýapp basic pre-condition for application of the transfer pricing legislation is that a provision must have been made or imposed between any two persons by means of a transaction or series of transactions, and this provision differs from the provision that would have been made between independent enterprises (see INTM412050 for full details about the meaning of ‘provisionâ€�).

This means comparing the controlled provision with the arm’s length provision. To do this it is necessary to understand the concept of transaction and series of transactions. This chapter looks at relatively straightforward transactions, such as the sale of physical goods (INTM440020), and then considers more complex issues involving intangible property (INTM440110) and series of transactions (INTM440190).

Royalties can be taxed at source as well as being subject to review using transfer pricing legislation. INTM440180 looks at when taxation at source occurs and the effect that double taxation agreements can have. »Ê¹ÚÌåÓýappre may be cases where a review of all of the facts leads to the conclusion that the provision cannot be compared with an arm’s length provision because at arm’s length the provision would not have been made at all. »Ê¹ÚÌåÓýapp chapter also considers the circumstances in which a provision may be set aside and replaced with something different: what would have happened between independents.

»Ê¹ÚÌåÓýappse concepts are considered from a more theoretical viewpoint in the chapter on transfer pricing legislation at TIOPA10/Part 4 starting at INTM412010.