Transfer pricing 2012

The smoke and mirrors around the "stage one" transfer pricing reforms

Source: The Tax Specialist Journal Article

Published Date: 1 Jun 2012


Despite vocal and significant criticisms from the tax community, the government is proceeding with the introduction of new, retrospective (going back to 1 July 2004) “treaty equivalent transfer pricing rules”. If the rules are enacted, taxpayers could face transfer pricing adjustments in respect of the last eight years, despite having complied with the law as it existed at the time the tax returns for those years were prepared. While the government claims that this is “clarification” of parliament’s previously expressed intention, taxpayers and the broader tax community strongly disagree.

This article covers the background to the new rules, both sides of the two key issues — “clarification” and the existence of “parliament’s intention” — and provides a view on whether the retrospective operation of the new rules is justified. The article concludes with the authors’ prediction on what is likely to happen next.

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Piotr Klank CTA

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Peter Collins

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Lyndon James ATI

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Transfer pricing 2012

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