Is Tax Law Subordinated to Contract Law in Transfer Pricing Matters

Tax law is not subordinated to contract law even as a matter of transfer pricing. The common law of taxation exists and is typically the starting point for the adjudication of tax disputes. International tax law also exists and evolves through the heuristics and practices of the tax profession, thereby determining the meaning of tax words. An individual tax penalty case such as Guindon is practically irrelevant to transfer pricing disputes under the common law. Common law systems generally do not cognize a “null” result in tax adjudication. Accordingly, there is no “rule of law” idea that guarantees multinational firms the ability to plan toward “null” results in taxation or to determine a “null” result in advance. Given that much of tax adjudication involves countering tax planning toward “null” results under positive law, the “best practices” of tax administration are essential to the larger legal system