Miscellaneous 2017

Branch attribution

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2017


The attribution of profits to branches or permanent establishments (PEs) is exceptionally complex under Australian law. Branch attribution is also becoming more difficult due to the current base erosion and profit shifting work on branch mismatch structures and Australia's own introduction of the new multinational anti-avoidance law and diverted profits tax. This article focuses on PE attribution for banks, from an Australian inbound and outbound perspective, and describes how our approach compares to the authorised OECD approach and what other countries are doing in practice. This article also discusses a number of current practical issues and ATO focus areas in branch attribution, and how those issues would be dealt with under the authorised OECD approach. Many of these issues will also be relevant to insurance companies and other financial services entities. The article also considers the future of Australian law in this area.

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Miscellaneous 2017

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