This research examines patterns of tax planning policies of multinational corporations in the area of international transfer pricing. The analysis focuses in particular on tax planning policies which cross the boundaries of arm's length range, and thus stand a higher likelihood to trigger the threat of regulatory actions. Using a sample of foreign-controlled subsidiaries incorporated in the Netherlands and applying the Comparable Profit Method to identify tax admissible performance, the study finds an unexpectedly low rate of compliance. In one out of two cases the reported performance of the foreign-controlled subsidiaries is placed outside arm's length boundaries. The study also shows that among compliant foreign-controlled subsidiaries a significant proportion is engaged in tax avoidance policies. The frequencies of foreign-controlled subsidiaries reporting performance at the boundaries of the arm's length range are unusually large. These findings raise questions regarding the efficiency and enforcement credibility of regulations in the area of international transfer pricing.