Transfer pricing Miscellaneous 2014

The arm's length amount of debt in the transfer pricing rules: Fiction or forgotten?

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2014


The overlap of Australia’s new transfer pricing laws with the thin capitalisation rules is causing challenges and likely duplication of analysis for taxpayers — particularly for the arm’s length amount of debt test. This article provides an overview of recent transfer pricing developments, outlines other related tax developments, including the current Board of Taxation review of the thin capitalisation arm’s length debt test, and analyses the interaction of the transfer pricing laws with the thin capitalisation rules.

The article concludes with an analysis of the consequences for taxpayers, including the recommended three-step economic analysis, additional documentation requirements and related penalties exposure.

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Transfer pricing Miscellaneous 2014

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