The OECD made the alignment of taxation and business substance a key pillar of the measures emerging from its BEPS programme. This means that substance, not legal form, will drive an arm’s length transfer pricing policy. The OECD’s updated Transfer Pricing Guidelines view substance as the economically significant activities, responsibilities, assets and risks of the parties. The changes have linked the concept of substance to the actions of people; and those people must be actively involved, not just passively approving decisions. Businesses must understand their substance through rigorous functional analysis, ensure that their transfer pricing policy reflects what they find, and then document it clearly.