(1) Where an arrangement exists between persons who are in a controlled relationship, the persons shall calculate their income, and tax payable, according to the arm’s length standard.

(2) The arm’s length standard requires persons who are in a controlled relationship, to quantify, characterise, apportion and allocate amounts to be included in or deducted from income to reflect an arrangement that would have been made between independent persons.

(3) The Minister may, by legislative instrument, make Regulations on matters relating to transfer pricing and the application of the arm’s length standard.

(4) Where in the opinion of the Commissioner-General, a person has failed to comply with subsection (1), the Commissioner-General may make adjustments consistent with subsection (2).

(5) The Commissioner-General may, in carrying out an adjustment in subsection (4),

(a) re-characterise an arrangement made between persons who are in a controlled relationship, including re-characterising debt financing as equity financing;

(b) re-characterise the source and type of any income, loss, amount or payment; and