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Transfer Pricing
Resources for Australia
Government Links
Australian Transfer Pricing
Regulations and Taxation Rulings
ATO's Transfer Pricing Guides
Relevant Tax Cases
News and Other Resources
Government Links
Australian
Tax Office (ATO) Home Page
National Tax Liaison Group (NTLG)
The NTLG is a consultative forum developed by
the ATO that deals with intricate technical and policy issues between the
tax, accounting and legal professions and the ATO. Included in this
group is a sub-committee on transfer pricing, which regularly holds meetings
on developments in transfer pricing in Australia and worldwide.
Meeting minutes are publicly available and provided at the link listed
above.
Australian Transfer Pricing
Regulations and Taxation Rulings
Division
13 Income Tax Assessment Act 1936 - Section 136 AD
References Arm's Length Principle and its
application to income tax assessment.
Tax Ruling
94/14
This Ruling provides guidance to taxpayers and
ATO staff to assist them to price, for tax purposes, their international
dealings, particularly any international dealings between related parties so
that the right amount of Australian income tax and withholding tax is
payable.
Tax Ruling
97/20
This Ruling explains how the arm's length
principle applies to international dealings between separate legal entities.
These are collectively referred to as 'Australia's transfer pricing rules'.
Applying the arm's length principle leads to a calculation of the taxable
income that might reasonably be expected to be derived if the parties were
dealing at arm's length with one another.
Tax Ruling
98/11
This Ruling sets out the ATO's views on
documentation and other practical issues that are relevant in setting and
reviewing transfer pricing in international dealings.
Tax Ruling
1999/1
This Ruling addresses the circumstances in which
regulations will be applied resulting in an arm’s length consideration being
deemed for services provided between separate legal entities.
Tax Ruling
2004/1
This Ruling explains how the arm’s length
principle applies to international dealings in relation to cost contribution
arrangements (CCAs).
Tax Ruling
2007/1
This Ruling gives the ATO the discretion to
establish the amount of withholding royalty tax due when a transfer pricing
adjustment has been made on transactions invoking the tax.
Tax
Determination 2008/3
This draft taxation determination states
that the ATO does not have to abide by classifications of debt or equity
under Australia’s debt-equity rules when determining the arm’s length nature
of interest in applying Australia’s transfer pricing provisions.
Taxpayer Alert 2008/18
This Taxpayer Alert describes
arrangements within multi-national companies operating through branches, or
operating through transactions with foreign associates, which seek to shift
deductions for losses from foreign operations into their Australian
businesses. Such arrangements are intended to result in the Australian
resident entity or branch reporting a lower taxable income than would have
been the case without the arrangement.
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ATO's Transfer Pricing Guides
International Transfer Pricing – Introduction to Concepts and Risk
Assessment
This overview explains the basic concepts
underlying international transfer pricing and when a business may face a
transfer pricing review or audit.
International Transfer Pricing - Applying the Arm's Length Principle
This guide explains how businesses can apply the
arm’s length principle in their international dealings with related parties.
International Transfer Pricing - Marketing Intangibles
In
this guide ATO provides a series of examples to illustrate its view on the
principles for determining an appropriate reward for marketing activities
performed by an enterprise in relation to a marketing intangible that it
does not own.
International Transfer Pricing -
Advance
Pricing Arrangements
This
guide explains how businesses can use an advance pricing arrangement with
the ATO to agree on how they will apply the arm’s length principle in future
years.
International
Transfer Pricing - Attributing Profits to a Dependent Agent Permanent
Establishment
This guide
explains how to apply Australia’s permanent establishment (PE) attribution
rules to a
PE that arises for a taxpayer through the activities of a third party. Such
a PE is commonly known, and is referred to in this guide, as a dependent
agent PE.
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Relevant Tax Cases
W.R. Carpenter Holdings Pty Limited V. Commissioner of Taxation
The High Court of Australia handed down a
decision in which it concluded that a taxpayer cannot challenge the basis of
transfer pricing assessments.
July 31, 2008
Roche Products Pty
V.
Commissioner of Taxation
This case considered whether the prices paid for the acquisition of certain
property from related parties must be adjusted for income tax purposes
because they were greater than the amounts that would be paid in arm's
length transactions. The taxpayer successfully showed the amended
assessments issued in respect of two of its divisions were excessive and
that the prices for which it acquired these products were arm's length
prices, with the bad results flowing from "operating expenses not
acquisition prices.”
July 22, 2008
St.
George Bank Limited V. Commissioner of Taxation
The Federal Court of Australia disallowed St. George Bank Ltd. from
deducting AU$250 million in loan interest to a U.S. subsidiary established
to permit the bank to fulfill capital adequacy requirements for maintaining
banking licensure following a 1997 merger.
April 11, 2008
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News and Other Resources
Australian Taxation Office - 2008-2009 Compliance Program - August 2008
The ATO announced
that it will continue to examine transactions between related Australian and
offshore entities that shift profits from Australia to other countries,
through a program of reviews and audits together with its Advanced Pricing
Agreement program.
August 2008
Intra-group Finance Guarantees and Loans
This is a discussion paper released by the ATO
on the interaction of Australia's thin capitalization and transfer pricing
rules. The purpose of the discussion paper is to facilitate
consultation between the ATO and businesses on the application of
Australia’s transfer pricing rules and the Associated Enterprises Articles
of Australia’s double tax treaties to intra-group finance guarantees and
loans.
June 2008
Convention Between Australia and Japan for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with Respect to Taxes on Income
This is a Convention for the avoidance of double
taxation and the prevention of income tax evasion applied to residents of
one or both of Australia or Japan.
Signed January 31, 2008 |
