Intragroup debt financing and transfer pricing in Australia
Source: The Tax Specialist Journal Article
Published Date: 1 Jun 2014
Intragroup financing within multinational groups can generate tax risk, and that tax risk has increased in recent years. One factor is the tendency on the part of revenue authorities to view intragroup debt funding as a means by which corporations can shift their tax exposure. This article considers transfer pricing issues and observations as they impact on intragroup debt. The article also touches on thin capitalisation.
The article considers quantum and pricing of debt, including the role of thin capitalisation, comparable transactions, the case law on key transfer pricing questions, pricing guarantees between parents and subsidiaries, the role of credit ratings, and how the Commissioner could apply the arm’s length principle embodied in Australian tax law to intragroup debt finance practices. Finally, the article considers how Australia’s domestic transfer pricing rules interact with the associated enterprises article contained in Australia’s double tax agreements.
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
- Published By: Chris Kinsella CTA
- Published On:1 Jun 2014
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
Copyright Statement
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags
Share this page