Location-Specific Advantages: A Rising Disruptive Factor in Transfer Pricing

Jinyan Li, Osgoode Hall Law School of York University
Stephen Ji

Abstract

In this article, the authors consider locationspecific advantages (LSAs) in transfer pricing analysis, with a special emphasis on the practice in China. They suggest that LSAs disrupt some of the basic assumptions underlying the current consensus on the application of the arm’s length principle without, arguably, violating the purpose of the principle as stated in article 9 of the OECD Model.