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

Published on 01 Apr 14 by "THE TAX SPECIALIST" JOURNAL ARTICLE

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.

Author profile:

Jock MCCORMACK
Jock is a Senior Revenue Partner at DLA Phillip Fox. He has significant expertise and experience managing complex tax and related matters for major multinational clients, including financial services, property development and investment, construction, tourism and major infrastructure projects.
Current at 14 September 2007 Current at 26 September 2007 Click here to expand/collapse more articles by Jock MCCORMACK.
 

 

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