(1) In determining the income of a person from a transaction with an associate, the standard to be applied by the Commissioner shall be that of a person dealing at arm's length with a person who is not an associate (referred to as the "arm's length standard").
(2) A controlled transactions shall meet the arm's length standard if the result of the transaction is consistent with the result (referred to as the "arm's length result") that would have been realized if uncontrolled persons had engaged in the same transaction under the same conditions.
(3) Subject to sub-rule (6), the following methods shall apply for the purposes of determining an arm's length result, namely:-
(a) the comparable uncontrolled-price method;
(b) the resale price method;
(c) the cost plus method; or
(d) the profit split method.
(4) The method in clause (d) shall apply only where the methods in clauses (a), (b) and (c) cannot be reliably applied.
(5) As between clauses (a), (b) and (c), the method that, having regard to all the facts and circumstances, provides the most reliable measure of the arm's length result as in the opinion of Commissioner shall be applied.
(6) Where the arm's length result cannot be reliably determined under one of the methods in sub-rule (3) the Commissioner may use any method provided it is consistent with the arm's length standard.
