Intra-company transactions have two rather conflicting characteristics; Trade decisions are made by fiat in a ‘captive market’ among a group of related parties, while the terms of trade must reflect actual market situations. on the other hand, antitrust regulators and tax authorities are closely monitoring these transactions to prevent possible ‘unfair’ trading and/or tax evasions. In this paper, we explore an economic model to determine intra-company trade terms based on the arm’s length principle. Then, we evaluate several methods that can be used to apply such economic model to actual intra-company transactions.