In this article, the authors look at the relationship between the “arm’s length principle” used for transfer pricing purposes and the “open market value” applied in determining the VAT tax base. In particular, the authors examine an issue that has not been adequately addressed in the tax literature, namely the relationship between the transfer pricing rules and the VAT provisions in situations in which, for VAT purposes, it is necessary to derogate from the general principle that the agreed consideration should apply.