ECONOMICS

Detailed explanation-1: -The OECD Transfer Pricing Guidelines provide guidance on the application of the “arm’s length principle", which represents the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises.

Detailed explanation-2: -Methods acknowledge by the OECD The five methods approved by the OECD are the comparable uncontrolled price (CUP) method, resale price method (RPM), cost plus method (CPM), transactional net margin method (TNMM) and the transactional profit split method (TPSM).

Detailed explanation-3: -The OECD Guidelines for Multinational Enterprises (OECD Guidelines) are recommendations from governments to multinational enterprises on responsible business conduct. The OECD Guidelines set standards for responsible business conduct across a range of issues such as human rights, labour rights, and the environment.

Detailed explanation-4: -The term ‘intra-group service’ relates to services that are provided by one company within an MNE group to another company within that same MNE group.