There can be situations where A would be willing to bear the indemnification costs at arm’s length, for instance because it expects that the termination of its agreement with B will make it possible for it to derive costs savings through its new manufacturing agreement with C, and that the present value of these expected costs savings is greater than the amount of the indemnification.
TPG2017 Chapter IX paragraph 9.95
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By OECD
Category: OECD Transfer Pricing Guidelines (2017) | Tag: Business restructuring, Compensation for termination or renegotiation, Indemnification , Payment of indemnification, Termination
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