773-660 Example of direct and indirect participation
The Mad Men group comprises Draper Ltd and its subsidiaries Joan Ltd, Campbell Ltd and Peggy Ltd. Campbell Ltd has an interest in a joint venture company, Cooper Ltd. The other shareholders in Cooper Ltd, Sterling Ltd and Betty Ltd, are not connected with the Mad Men group. The group structure is as follows:
Transfer pricing relationships in the absence of financing arrangements
For the transfer pricing rules to apply, one of the affected persons must directly or indirectly participate in the management, control or capital of the other or the same person or persons must directly or indirectly participate in the management, control or capital of both affected persons (TIOPA 2010, s. 147(1) and 148; see ¶773-400).