The Exposure Draft of the Tax Laws Amendment (Cross Border
Transfer Pricing) Bill 2013: Modernisation of transfer pricing
rules was released on 22 November 2012. This is intended to give
effect to the second stage of the Government's transfer pricing
reforms announced in November 2011.
The key points in this tranche of transfer pricing reforms
Division 13 will be repealed and new Subdivisions 815-B, 815-C,
815-D and 815-E will be introduced;
the rules will be self-executing and no longer require the
Commissioner to make a determination;
unlike Division 13 (which focuses on the pricing of individual
transactions), the new rules adopt a profit based approach;
like new subdivision 815-A (the treaty equivalent transfer
pricing rules), the provisions expressly allow for the use of OECD
subdivision 815-B contains an express reconstruction power
(allowing the Commissioner to have regard to the "economic
substance" of a transaction and potentially reconstruct a
the provisions set out the types of transfer pricing
documentation an entity may prepare - this is not mandatory,
however, taxpayers who have not prepared contemporaneous
documentation will not be entitled to a lower base penalty amount
(ie. cannot argue that they have a "reasonably arguable
the unlimited amendment period for transfer pricing adjustments
has been reduced to 8 years.
Submissions are due 20 December 2012. We'll be releasing
more detailed analysis of the reform soon. If you'd like any
further information, or help on preparing a submission, please
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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Various approaches are taken by law firms in calculating the GST payable by a purchaser under a contract for the sale of property which attracts GST.
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