This article deals with non-recognition of transactions under Paras. 1.36-1.41 of the OECD Guidelines in light of the guidance provided in the OECD Discussion Draft on the Transfer Pricing Aspects of Business Restructurings. It analyses the interaction among domestic anti-abuse and tax treaty provisions as interpreted by the OECD Guidelines and the OECD Discussion Draft, and examines the practical problems which might result from implementation of OECD Discussion Draft.