Miscellaneous 2010

Safe harbour or rule of thumb

Source: The Tax Specialist Journal Article

Published Date: 1 Feb 2010

The ATO is taking an expansive view of its transfer pricing powers. The release of a new draft ruling on the interaction of the thin capitalisation and transfer pricing rules has implications for all taxpayers with loans or guarantees with cross-border related parties. Taxpayers who have sought the refuge of the thin capitalisation “safe harbour” will still need to calculate a hypothetical gearing structure for a financially independent entity in the position of the taxpayer. This article explores the ATO’s position and the implications it has for non-residents funding their Australian businesses.

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Miscellaneous 2010

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