By Stuart Jones
The Government has released an exposure draft of proposed amendments that would implement the first stage of reforms to transfer pricing. The proposed amendments follow the Full Federal Court decision in theSNF case in 2011 and are on the Treasury website.
The Assistant Treasurer said the draft legislation takes into account a number of key issues raised by stakeholders through earlier consultation processes. He said the proposed amendments confirm that, in relation to treaty cases, the transfer pricing articles contained in Australia’s tax treaties are able to be applied and operate independently of Australia’s unilateral transfer pricing rules.
The operation of the proposed Subdivision would be limited to cases where its application would result in a greater amount of taxable income in Australia, a decrease in the tax loss of the entity or a decrease in a net capital loss of the entity relative to what has been returned.