The arm’s length principle is a worldwide concept. Only when all tax administrations involved in a transaction recognize this principle can double taxation or double non-taxation be avoided, given that the arm’s length principle is interpreted alike in all countries. For the time being, however, worldwide recognition as well as consistent transfer pricing practice and interpretation are far from reality. In a globalized economy, transactions not only take place between enterprises within highly developed areas, but also between developed and developing countries. Tax issues, in particular regarding the right to tax profits from such transactions, must be solved among tax administrations at an equally different level of expertise. The respective bilateral tax treaty forms the basis of the allocation of taxing rights. Norbert Roller shows crucial aspects of transfer pricing with regard to developing countries.