The preamble sets out the decree’s objective of administering transfer pricing in order to prevent the loss of tax revenue to the state budget. It also introduces the concept of ‘‘substance over form’’ to be applied by tax officials in the administration, examination and auditing of transfer pricing.

This new principle will be applied to analyze legal contracts and documents of related party transactions as well as business operations of parties engaged, so as to determine the nature and substances of related party transactions incurred.

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