CAF-2 · Chapter 19 · Question 14 of 15
How are transactions between associated persons treated under Section 25AA during a sales tax audit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) The Commissioner or officer determines the transfer price to reflect the fair market value of supplies in an arm’s length transaction.
Explanation
Under Section 25AA, the Commissioner or an officer of Inland Revenue may determine the transfer price of taxable supplies between associated persons as is necessary to reflect the fair market value in an arm’s length transaction.
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