1.The main purpose of a simultaneous tax examination is, inter alia:(a)to determine a taxpayer’s correct liability in cases where:(i)costs are shared or charged and profits are allocated between taxpayers in different taxing jurisdictions or, more generally, transfer pricing issues are involved;(ii)apparent tax avoidance techniques or patterns involving substance versus form transactions, controlled financing schemes, price manipulations, cost allocations or tax shelters are identified;(iii)unreported income, money laundering, kickbacks, bribes, illegal payments, etc. are identified;(iv)transactions with tax havens and tax avoidance or evasion schemes involving tax havens are identified.(b)to facilitate an exchange information on:(i)multinational business practices, complex transactions, examination issues and non-compliance trends that may be particular to an industry or group of industries;(ii)cost sharing arrangements;(iii)profit allocation methods in special fields such as global trading and new financial instruments.2.A simultaneous tax examination is not intended to be a substitute for the mutual agreement procedure provided for under Article 25 (mutual agreement procedure) of the Convention.
