The arm's length principle and groups dynamics - part 1 : the conceptual shortcomings

This article deals with shortcomings of the arm's length principle in its application within multinational enterprises. Distinguishes between conceptual shortcomings, following from the different functioning of MNEs in comparison with independent enterprises, and process-related shortcomings, which include diverging application of the arm's length principle in various countries, time-consuming contacts with tax authorities and a constant state of uncertainty regarding the effective tax burden.