Comparative Jurisprudence on the Application of the Arm’s Length Principle

Abstract

Article Info The Arm’s Length Principle (ALP), anchored in Article 9 of the OECD Model Tax Convention, remains the cornerstone of global transfer pricing regulation. Yet, its practical Volume 6, Issue 3 application exhibits wide divergence across jurisdictions, shaped by institutional capacity, economic structure, legislative evolution, and political will. This article undertakes a Publication history: comparative analysis of how selected countries - including the United States, United Accepted on 29 April 2025; Kingdom, China, Brazil, Canada, Germany, India, Uzbekistan, Kenya, South Africa, and Published: 1 May 2025 Zimbabwe - have implemented and enforced the ALP within their transfer pricing frameworks. Using doctrinal, functional, and policy-analytical approaches, the study Article DOI: critically assesses the congruence or departure from OECD standards, the robustness of 10.59413/ajocs/v6.i3.3 local legislation, the sophistication of enforcement mechanisms, and emerging jurisprudence. It draws implications for Zambia, arguing that the country’s adoption of ALP-based transfer pricing regulation must be informed by nuanced understanding of international legal transplant theory, contextual enforcement limitations, and the need for policy coherence between domestic imperatives and international obligations. The study concludes by advocating for a hybrid, context-sensitive ALP application model tailored to Zambia’s institutional and developmental needs.