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The arm’s length comparable in transfer pricing: a search for an “actual” or a “hypothetical” transaction?

journal contribution
posted on 2015-01-01, 00:00 authored by Amir Pichhadze
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).

History

Journal

World Tax Journal

Volume

7

Issue

3

Publisher

International Bureau of Fiscal Documentation

Location

Netherlands

ISSN

1878-4917

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2015 IBFD

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