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New transfer pricing rules: Subdiv 815-A


Tough new transfer pricing rules are contained in an amending Bill which was introduced into federal parliament in May 2012. The proposed amendments are intended to clarify the assessing authority of the transfer pricing articles contained in Australia’s double tax agreements (DTAs) and to deal with perceived concerns about the potential risk of revenue leakage. The government wishes to ensure that Australia’s transfer pricing rules, both under domestic law and in the DTAs, are interpreted as consistently as possible with the OECD transfer pricing guidelines, in particular. It is anticipated that these expanded transfer pricing rules will have a significant impact on all global businesses, including both inbound and outbound investors.

This article examines the proposed amendments in detail, and notes that it is likely that the amending Bill will become law in the near future. Further changes dealing with prescriptive documentation requirements, transfer pricing methodologies and penalties may be part of a second tranche of amendments.

Author profile

Jock McCormack CTA
Jock McCormack, DLA Piper, is a leading Sydney-based international taxation lawyer with specific expertise in income tax and more than 30 years experience managing complex tax matters. Jock's major areas of expertise include debt and equity structuring, acquisitions/mergers/divestments, international tax including transfer pricing, capital gains tax and major projects taxation issues. Jock also advises various major corporations on ATO tax audits, tax strategy reviews, litigation and related issues including managing, negotiating and settling challenging and contentious tax issues and reviews. - Current at 24 November 2014
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