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The Commissioner’s hypothesis about your business – Transfer pricing observations

Published on 01 Sep 14 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

In Australian income tax law, there are two areas in which the Commissioner of Taxation may advance a hypothesis about how business transactions should have been undertaken, or that a particular business transaction would not have been undertaken. These are the general anti-avoidance rules in Pt IVA of the Income Tax Assessment Act 1936 (Cth) and the transfer pricing rules in Div 13 of Pt III of that Act, and Div 815 of the Income Tax Assessment Act 1997 (Cth). Both areas have recently been subject to amendment. This article examines elements of the new transfer pricing rules concerning the formulation of hypotheses, with a view to identifying likely ar eas of difficulty for both taxpayers and the A TO.

The article also considers recent findings concerning the ATO management of transfer pricing matters. In the author’s view, recent Div 13 cases continue to provide helpful guidance when considering the formulation of hypotheses under the new rules.

Author profile:

Tony PANE
Tony is Special Counsel with Thomson Greer.
Current at 1 September 2014
Click here to expand/collapse more articles by Tony PANE.
 
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