The smoke and mirrors around the "stage one" transfer pricing reforms
Publication date: 01 Jun 12
Source: "THE TAX SPECIALIST" JOURNAL ARTICLE
Abstract:
Despite vocal and significant criticisms from the tax community, the government is proceeding with the introduction of new, retrospective (going back to 1 July 2004) “treaty equivalent transfer pricing rules”. If the rules are enacted, taxpayers could face transfer pricing adjustments in respect of the last eight years, despite having complied with the law as it existed at the time the tax returns for those years were prepared. While the government claims that this is “clarification” of parliament’s previously expressed intention, taxpayers and the broader tax community strongly disagree.
This article covers the background to the new rules, both sides of the two key issues — “clarification” and the existence of “parliament’s intention” — and provides a view on whether the retrospective operation of the new rules is justified. The article concludes with the authors’ prediction on what is likely to happen next.
Author profiles:
Lyndon James ATILyndon is a Partner at PricewaterhouseCoopers.
Current at 01 July 2012
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Piotr Klank CTA
Piotr is a Manager at PricewaterhouseCoopers.
Current at 01 July 2012
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Peter Collins FTI
Peter is a Partner at PricewaterhouseCoopers in Melbourne. Peter’s primary focus for the past 20 years has been providing assistance with tax issues associated with cross-border investment. Peter leads the International Tax Services practice in Australia and he works with the firm’s global tax network to develop solutions for clients. Peter has been regularly identified by the International Tax Review as a leading adviser on international tax and M&A transactions.
Current at 01 July 2012
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