Comparative Jurisprudence on the Application of the Arm’s Length Principle: A Global Survey of Transfer Pricing Regulation and its Implications for Zambia

Victor  Mwape; Austin  Mwange; Munyonzwe  Hamalengwa

doi:10.59413/ajocs/v6.i3.3

Authors

Victor Mwape University of Zambia, Institute of Distance Education, Lusaka, Zambia Author
Austin Mwange The University of Zambia, Graduate School of Business, Lusaka, Zambia Author https://orcid.org/0000-0001-8568-3063
Munyonzwe Hamalengwa School of Law, Zambia Open University, Lusaka, Zambia Author

DOI:

https://doi.org/10.59413/ajocs/v6.i3.3

Keywords:

Arm’s Length Principle, Transfer Pricing Regulation, OECD Guidelines, Comparative Tax Law, Multinational Enterprises (MNEs), Zambia Tax Policy

Abstract

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 application exhibits wide divergence across jurisdictions, shaped by institutional capacity, economic structure, legislative evolution, and political will. This article undertakes a comparative analysis of how selected countries - including the United States, United Kingdom, China, Brazil, Canada, Germany, India, Uzbekistan, Kenya, South Africa, and Zimbabwe - have implemented and enforced the ALP within their transfer pricing frameworks. Using doctrinal, functional, and policy-analytical approaches, the study critically assesses the congruence or departure from OECD standards, the robustness of 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.

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