In this article, the authors explain the compromise approach developed by courts when setting transfer prices for transactions where there are no actual comparable arm’s length prices and illustrate the process with recent examples from Australia

In response to developments in international trade and an increased focus on international transfer-pricing issues, Canada’s minister of finance announced in the 1997 budget that the Department of Finance would undertake a review of the transfer-pricing provisions in the Income Tax Act. On...

This chapter examines the historical development of the formulary apportionment approach in key jurisdictions.From the time income taxes were first widely enacted, tax designers have been concerned with the question of how to allocate profits in transactions that incorporated labour, capital or...

The SNF case in Australia revealed that in Australia a court could interpret domestic transfer pricing rules differently from those in Australia's tax treaties. In particular, the court rejected the use of OECD transfer pricing guidelines to determine an arm's length price under domestic law....