TPguidelines

The changes in fact pattern from Example (B) support a conclusion that the economic substance of the arrangement does not differ from its form, and that independent enterprises in comparable circumstances acting in a commercially rational manner would have characterised or structured the arrangement as the associated enterprises have. Given this, a tax administration should seek to achieve an arm’s length outcome in this situation by determining arm’s length pricing for the restructuring itself and the parties’ post-restructuring activities based upon recognising the arrangement actually undertaken.
(This does not say anything about the possible application of domestic anti- abuse rules.)