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A comparitive analysis of the legislative framework for the transfer pricing of intangible assets in Australia and the United States


This article provides an in-depth comparative analysis of the Australian and American transfer pricing regimes in respect to transfers of intangible assets. In Australia, there has been considerable debate amongst transfer pricing practitioners as to whether Div 13, Part III of the Income Tax Assessment Act 1936 is compatible with achieving arm’s length outcomes for intangible assets, particularly in view of the recent decision of the Administrative Appeals Tribunal in Roche Products Pty Limited v Commissioner of Taxation. Implicit to these questions is the role of Australia’s tax treaty network, specifically the relationship between Div 13 and Article 9 of the OECD Model Convention which the ATO has increasingly relied on for the transfers of intangibles. The United States has enacted specific rules for the transfer pricing of intangible assets. This has allowed the Internal Revenue Service (IRS) to make aggressive assessments against Multi-National Enterprises (MNEs) which, in turn, has resulted in a plethora of transfer pricing litigation. On the other hand, the United States has achieved greater certainty in the relationship between its domestic legislation and tax treaties, and its experiences may offer some guidance to Australian tax administrators.

Author profile

Dylan Damon
Dylan is a Lawyer of the Supreme Court of New South Wales. - Current at 01 November 2008


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