Arms Length Agreement

In order to ensure that there are no problems, an independent assessment should be carried out to ensure that the selling price has not been influenced by the relationship between the parries and reflects the real value of the property. Other examples of discussions on the principle of cross-border transactions are the analysis of organisations that may have a particular influence on other parties, particularly in the public sector. If Colin sells the house overseas, it would be a third-party transaction, as both parties are independent and act in their own interests. As has already been said, competing transactions can have tax consequences if they are not handled properly and, therefore, the problem is the one that often arises when considering tax legislation and tax treaty. The Organisation for Economic Co-operation and Development (OECD) Model Agreement addresses this issue with regard to transfers between multinationals. A comparative price is a price that a willing buyer and seller would reasonably agree with if the buyer tried to get the lowest possible price and the seller tried to get the highest possible price.. . .