Safe harbours may also provide taxpayers with tax planning opportunities. Enterprises may have an incentive to modify their transfer prices in order to shift taxable income to other jurisdictions. This may also possibly induce tax avoidance, to the extent that artificial arrangements are entered into for the purpose of exploiting the safe harbour provisions. For instance, if safe harbours apply to “simple” or “small” transactions, taxpayers may be tempted to break transactions up into parts to make them seem simple or small.
TPG2017 Chapter IV paragraph 4.122
Category: E. Safe harbours, OECD Transfer Pricing Guidelines (2017), TPG2017 Chapter IV: Administrative Dispute Resolution | Tag: Safe harbour
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