The article examines the interaction of domestic anti-abuse rules with Article 9 of the Organization for Economic Cooperation and Development (OECD) Model Convention. To be considered non-abusive, a transaction must do more than satisfy domestic anti-abuse provisions. It must also pass the test under the treaty rule that incorporates paragraphs 1.36-1.41 of the OECD Transfer Pricing Guidelines. If tax authorities may not re-characterize transactions under domestic law, they may do so under a treaty, which may broaden the power of tax authorities to re-characterize transactions.
Intertax