Given the current economic environment, it is possible that independent parties may not strictly hold another party to their contractual obligations, particularly if it is in the interest of both parties to renegotiate the contract or to amend certain aspects of their For example, unrelated enterprises may opt to renegotiate a contract to support the financial survival of any of the transactional counterparties given the potential costs or business disruptions of enforcing the contractual obligations, or in view of anticipated increased future business with the counterparty. This behaviour should be considered when determining whether or not associated parties would agree to revise their intercompany agreements in response to COVID-19.
OECD COVID-19 TPG paragraph 43
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By OECD
Category: OECD Transfer Pricing Guidelines (2017) | Tag: Accurate delineation, COVID-19, Interest of both parties, Modification to contractual arrangements, Renegotiation of the existing contractual arrangements, Separate entity
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