The objective of this Article is to discuss the interaction between the Arm’s Length Principle (ALP) and the Pillar II GloBE Model Rules (GloBE rules) from a technical and policy perspective. In particular, the author analyses the technical impact of transfer pricing (TP) rules on the denominator as well as the numerator of the formula to determine Effective Tax Rates (ETRs). With respect to the denominator, the author examines Article 3.2.3, which provides for adherence to the ALP requirement. Thereafter, the author analyses the impact of TP audit adjustments on the numerator by examining Arti-cle 4.6.1. The interaction throughout the Article will be presented through several numerical illustrations that take into account outcomes agreed in unilateral APAs, bilateral APAs, unilateral TP audits as well as Mutual Agreement Procedures or/and Arbitration Procedures (including undecided outcomes in such proceedings). The analysis indicates that the interaction issue is high-ly complex and is far from resolved as ALP related ad-justments are now linked to the newly introduced principle of avoiding double taxation/double non-taxation that arises from the interaction between the existing corporate income tax (CIT) system and the GloBE rules. After expressing selected thoughts on the emergence of this new principle, the author highlights that the interaction issue could create additional administrative burdens and tax uncertainty for in-scope MNE Groups if the GloBE Model Rules, in particular the ALP related requirements, are interpreted differently by different States when GloBE taxing rights are allocated to them. In this regard, the author emphasizes on the development of appropriate dispute management tools. Finally, in addition to including qualified domestic minimum top-up taxes (QDMTTs) within the scope of the pro-posed safe harbour, the author comments on the inter-action of the ALP with such mechanism