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14 Sep 12 Transfer Pricing Working Group

On Wednesday 29 August 2012, Damian Preshaw FTI attended the inaugural meeting of the Transfer Pricing Working Group of the NTLG International Sub-committee. At that meeting participants discussed a number of matters as follows:

  • The ATO noted that the Working Group was intended to provide a forum for discussion of administrative issues arising out of the government’s review of the transfer pricing rules (ie Phase 1 – Introduction of Subdivision 815-A; Phase 2 – wider review foreshadowed in 1 November 2011 Treasury discussion paper; and Phase 3 – Review of rules relating to attribution of profits to permanent establishments).  The ATO noted that their ability to discuss matters in Phase 2 and Phase 3 would be severely limited prior to any legislative changes becoming law pursuant to PS LA 2004/6.
  • External members identified a range of concerns in relation to the manner in which the ATO would seek to apply the retrospective reconstruction power contained in the new Subdivision 815-A and identified a number of issues in relation to which ATO guidance was sought on the application of this subdivision. Members agreed to discuss such issues in detail at future meetings.

The next meeting of this Working Group is likely to be held in late September or early October 2012. Members who seek additional detail in relation to the above are welcome to contact us at Tax Policy.