Article 126 empowers the Tax Authority to adjust the results of related party transactions (Transfer Pricing adjustment). If a transaction between related persons is conducted on terms that result in a lower taxable income or higher loss than would have occurred between independent persons, the Authority will ignore the agreed terms. Instead, it will re-calculate the taxable income or loss based on 'arm's length' terms—the conditions that would have been agreed upon by independent parties. This ensures that profits are taxed in Oman according to their true economic value rather than artificial pricing.