Extract to table

The standard is premised on the "separate entity" approach: each controlled entity within a multinational group is treated as an independent economic actor, and the pricing of transactions between controlled entities must reflect the pricing that would be established between independent parties operating at arm's length

The regulation emphasizes that each controlled transaction must be evaluated individually, though related transactions may be aggregated where appropriate for reliability purposes

482-1(c) provides that the arm's-length result of a controlled transaction must be determined under the method that, given the facts and circumstances, provides the most reliable measure of an arm's-length result

Rather, the taxpayer must analyze the relative reliability of the reasonably available methods and select the one that produces the most reliable result

482-3(a) reiterates the best method rule and provides that the method selected must be the one that, given the facts and circumstances, provides the most reliable measure of an arm's-length result

The PLI selected must be appropriate for the tested party and the type of transaction