20ls Frxaxcr (l'{o. 2) No.9 "THIRTY-FIF'TH SCI-ffiDULE (Section 988 Tnq,NstrEn ) Pmcnlc Interpretatiort I . In this Schedule - "comparable transaction" means a transac,tion that is comparable by reference to paragraph 3; "urlcontrolled transaction" means anv transaction between independent persons; Arm's len gtlz princ iple 2. The deterrnination of whether the conditions of a controlted transaction are consistent with the arm's length principle for the pu{poses of section 988 shall be made by the Comrnissioner-General in accordance with this Schedule. Conzparability 3. (1) An uncontrolled transaction is comparable to a controlled transaction r,vithin the meaning of section 988(1)- (a) (b) when there are no differences between them that could materially affect the financial indicator being examined under the appropriate transfer pricing method; or lvhen such differences exist, if a reasonably accurate comparability adjustment is made to the relevant financial indicator of the uncontrolled transaction in orderto eliminate the effects of such differences on the comparison. (2) To determine whether hvo or rnore transactions are cornparable, the following factors shall be considered to the extent that they are economically relevant to the facts and circumstances of the fransactions - (a) the characteristics of the property or services transferred; (b) the functions undertaken by each person with respect to the transactions, taking into account assets used and risks and assumed; and (c) (d) (e) the contractual terms of the transactions; and the economic circumstances in rvhich the transactions take place; and the business strategies pursued by each of the associated persons in relation to the transactions. Tronsfer pricing 4. ( I ) The arm's length remuneration of a controtled transaction shall determined by applying the rnost appropriate transfer pricing method be to the circumstances of the c.ase. (2) The rnost appropriate transfer pricing method shall be selected from among the approved transfer pricing methocls set out in paragraph 5(5), taking into consideration the follorving criteria- (a) the respectirre strengths and r'r'eaknesses methods; and (b) the appropriateness of an approved method in view of the nature of the controlled transaction, cleterrnined in particular 184 of the approved