Under the amended regulations, the tax authority will be able to perform the so-called recharacterisation of a transaction with a related party and assess the tax consequences resulting from this newly classified transaction. It will also be able to consider that no transaction has taken place or was of an apparent nature or one to which independent entities would not agree, as well as impose an additional tax, e.g. an exit fee, in the case of business restructuring involving the transfer of production/sales/licensing functions, etc. to another related entity.

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