The module also covers the very important Arm’s Length Principle and Functional Analysis, laying further groundwork for the rest of the course.
The “Arm’s-Length Principle” of transfer pricing states that the amount charged by one related party to another for a given product must be the same as if the parties were not related. An arm’s-length price for a transaction is therefore what the price of that transaction would be on the open market.
The functional analysis is used for transfer pricing purposes. It analyses the functions performed (taking into account assets used and risks assumed) by associated enterprises in a transaction.
This course is Module 1 of a 4 Module course on Transfer Pricing. Each Module stands separately, however, we suggest that you complete all 4 courses in order to get the full benefit of these teachings.
Additional Modules in the whole course are:
- Module 1(this course) – Transfer Pricing Legal Framework
- Module 2 – Sharing Corporate Resources
- Module 3 – Transfer Pricing Specialised Areas
- Module 4 – PE’s & Compliance and Dispute Resolution