Monday, 6 June 2016

Australia’s tax authorities target cross-border profit-shifting arrangements

The Australian Taxation Office (ATO) released four taxpayer alerts on 26 April 2016 that
identify certain issues of concern to the ATO, as a result of the active review of certain
arrangements used by multinationals and large companies operating in Australia. The ATO
wants to ensure these companies pay the “right amount of tax” on income earned in Australia.
A taxpayer alert provides a summary of ATO concerns about a significant, emerging or
recurring higher-risk tax issue. The alerts are intended to provide an “early warning” to
taxpayers and advisers that a type of arrangement may be subject to increased scrutiny or the
subject of further guidance from the ATO.
The four taxpayer alerts address the following:

  • Interim arrangements in response to the Multinational Anti-Avoidance Law (MAAL);
  • Inappropriate recognition of internally generated intangible assets and revaluation of intangible assets for thin capitalization purposes;
  • Arrangements involving related party foreign currency-denominated financing, in conjunction with related party cross-currency interest rate swaps; and
  • Cross-border leasing arrangements involving mobile assets.

Source & more info: Deloitte