Transaction market value range based on arm’s length principle for customs and tax purposes

Abstract

The purpose of the article is to examine the similarities and differences between transfer prices and customs values due to the importance of international trade. The transfer price is the price set in the transaction between two related companies if they operate from different countries or customs territories. In this case, the customs burden comes in between and impacts the prices. As price should be an arm’s length based on customs and transfer price perspective, some issues could arise as the rules are not identical from customs and transfer pricing perspective.