The purpose of the ____________________ is to restrict the benefits of transfer pricing.

Question

Quizplus · Accepted Answer

The arm's length principle is a guideline used in transfer pricing to ensure that transactions between related parties are conducted at arm's length, meaning as if they are unrelated. This principle is designed to prevent companies from artificially inflating profits or reducing taxes by artificially manipulating transfer prices. As such, the arm's length principle serves to restrict the benefits of transfer pricing.

The Purpose of the ____________________ Is to Restrict the Benefits