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of <h1>Arrangement lacks commercial substance when its form differs materially from effect or exists primarily to secure tax benefits</h1> An arrangement lacks commercial substance if its overall effect diverges materially from its form, or if it involves round-trip financing, an accommodating party, offsetting elements, transactions that disguise the value/location/source/ownership/control of funds, placement of assets/transactions/residence solely to obtain tax benefit, or no significant effect on business risks or net cash flows apart from the tax benefit. Round-trip financing covers transfers among parties lacking substantial non-tax commercial purpose regardless of traceability, timing or manner of transfers. A party is accommodating if its principal participation aims to procure a tax benefit. Certain factors (duration, tax payments, exit routes) may be relevant but are not determinative.
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