Do companies have to use the fair pricing rule from their first year of paying taxes?
Yes, they do. The fair pricing rule applies to all deals between a company and the other companies it’s connected to, and it affects how much money they report on their taxes each year.
This means that when they set prices for deals with related companies, they have to make sure it’s a fair price, like what two separate companies would agree upon for the same thing. You can check question [241] for more details on how they figure out this fair price.
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