This Article confirms the authority of the United States under section
482 of the Code. Thus, where a person subject to the taxing jurisdiction
of a Contracting State (whether or not a resident thereof) and any other
related person make arrangements or impose conditions between them
selves which are different from those which would be made between inde
pendent persons, under paragraph (1), any income, deductions, credits
or allowances which would, but for thoSe arrangements or conditions,
have been taken into account in computing the income or loss of, or the
tax payable by, one o! such persons, may be taken into account in comput
ing the amount of the income subject to tax and the taxes payable by such
person in that Contracting State,
Paragraph (2) sets forth an explicit formulation of the consequence
of a redetermination made in accordance with paragraph (1) by a Con
tracting State to the income of one of its residents. In such event. the
other Contracting State will, if it agrees with such redetermination and
if necessary to prevent double taxation, make a corresponding adjust
ment to the income of a person in such other Contracting State related
to such resident. In the case of the United States, any refunds of
tax in respect of such an adjustment shall be made notwithstanding
the statute of limitations. In situations where the other Contracting
State disagrees with the redetermination, the two Contracting States,1dll
endeavor to reach agreement in accordance with the mutual agreement
procedure in paragraph (2) of Article 25 (Mutual Agreement Procedure.),
. For a discussion of the mutual agreement procedure and a fuller explana
tion of the operation of the statute of limitations with respect to adjust
ments see the discussion under Article 25,
Paragraph (3) provides that tor purposes ot the Convention a person
is related to another person if either person owns or controls directly
or indirectly the other, or if a third 'Rerson or persons own or control
directly or indirectly both, "Control includes any kind of control,
wh�ther or not legally enforceable, and however exercised or exercisable,
