Page 18 - International Taxation IRS Training Guides

Income Shifting Outbound:
Arm’s

Length Standard

not unlawful in and of itself, if the
 Income shifting is

related parties reach an arm’s length price, then the

resulting income shifting is permissible.

 The transfer
pricing IRC and regulations provide that

transactions between controlled parties
the pricing for

must meet the arm’s
length standard, which is met if
the results
are consistent with those that would have

been realized between uncontrolled parties
under the
same or similar
circumstances.

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