Whether they are sales or purchase of goods, provision of services, borrowing or lending of money or use and transfer of intangibles, transactions between related parties present a high concern regarding possibilities to shift profits and to evade taxation, as related parties transacting with each other are highly exposed to set their pricing at a level which does not reflect market conditions due to a lack of independence in their commercial and financial relations. It is the case basically when related parties are located in different jurisdictions with different tax rates.
Intertax