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  • Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 11/27/2012

Australia - Proposed amendments to domestic transfer pricing rules 

November 27: The Australian Assistant Treasurer released, on 22 November 2012, an exposure draft of legislation—Tax Laws Amendment (Cross-Border Transfer Pricing) Bill 2013: Modernisation of transfer pricing rules—proposing changes to Australia's domestic transfer pricing rules.

The new rules, rather than focusing on an arm's length price, look at cross-border "conditions." The rules would seek to provide that the amount brought to tax in Australia from those conditions would not be less than it would be if those conditions reflected the arm's length contribution made by Australian operations through functions performed, assets used, and risks assumed.


The exposure draft arises out of the Treasury Consultation Paper Income Tax: cross border profit allocation: Review of transfer pricing rules (1 November 2011) that highlighted a range of issues with Australia's transfer pricing rules following judicial opinion in recent transfer pricing cases.


The exposure draft legislation also is shortly after the introduction of the new Subdivision 815-A of the Income Tax Assessment Act 1997 (ITAA 1997), which became law on 8 September 2012 and introduced retroactive amendments to the law in relation to the transfer pricing rules that apply to treaty cases in income years commencing on or after 1 July 2004.


Read a November 2012 report [PDF 128 KB] prepared by the KPMG member firm in Australia: Exposure Draft legislation for Government’s proposed transfer pricing changes



Contact a tax professional with KPMG's Global Transfer Pricing Services.




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