Transfer pricing Income tax 2020

Evaluating the Glencore transfer pricing decision

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2020

 

Australia's transfer pricing laws entail a significant degree of uncertainty due to the unique power they confer to the Commissioner to determine an arm's length profit of an international transaction and treat it as assessable income of the taxpayer. The limits of these powers were greatly illuminated on 3 September 2019 when Davies J delivered her quintessential judgment in favour of the taxpayer in Glencore Investment Pty Ltd v FCT. This article contends that the precedent in this matter effectively limits the Commissioner's discretion to modify or restructure transactions for comparative purposes by establishing a more rigid and procedural methodology that must be followed to effectively wield the powers under Div 815 of the Income Tax Assessment Act 1997 (Cth).

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Anthony Milton

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