TPG1979 Chapter I Paragraph 25

« | »

The flexibility of arrangements available to MNEs may, however, create a problem for them as well as for tax authorities. If the transactions are not adequately evidenced by contemporary documents it is clearly more difficult for the MNE to convince the tax authorities that they took place in the form and manner claimed or that the transactions compare properly with particular transactions between unrelated parties. Retroactive agreements would justifiably be rejected moreover as inadequate to explain transactions taking place before the agreements. This is not to say that evidence can con sist only of written contracts or agreements or that documentary evidence should be required in relation to every transaction. It is clearly desirable to avoid burdening MNEs with unnecessary documentation requirements. It would be reasonable, however, to require MNEs to provide in support of any important contention either the relevant legal documents and explanatory material or at any rate sufficient information to allow the tax authorities to arrive at an informed judgement in the matter.






Related Guidelines


Related Case Law