Views on the bills
2.1
The committee received a variety of views on the provisions of the bills
from stakeholders. While some submissions supported the strengthening of laws
to address multinational tax avoidance, other submissions considered the
measures unnecessary and unfair. This chapter considers submitter's views in
regard to each of the proposed measures.
Diverted profits tax
2.2
The majority of stakeholder comments related to the proposed
implementation of the diverted profits tax—that is, schedule 1 of the Treasury
Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 and the
Diverted Profits Tax Bill 2017.
2.3
Submissions were mixed on the need for Australia to unilaterally impose
a diverted profits tax (DPT) to strengthen the anti-avoidance tax provisions.
2.4
A variety of reasons were given by stakeholders as to why they did not
support the introduction of a DPT. For example, the Institute of Public Affairs
disputed the underlying premise of profit shifting by multinationals operating
in Australia:
...the case that firms operating in Australia are shifting
profits overseas and reducing the corporate tax base is unsupported...
A diverted profits tax is likely to increase investment
uncertainty and sovereign risk in Australia...[1]
2.5
Similarly, the Australian Taxpayers' Alliance noted that the scale of
the problem is unknown and remains unconvinced that the introduction of the DPT
would not have a 'chilling' effect on investment.[2]
2.6
The Tax Institute questioned the value of a DPT in the Australian
context and considered the objectives intended to be satisfied by the
introduction of the DPT could be satisfied by provisions that already exist in
the tax law:
The Tax Institute has significant concerns with the proposed
DPT. In short, we question the utility of a DPT being inserted into the
Australian tax system as it means that Australia will fall out of step with the
majority of OECD countries in relation to the collective action being taken to
address base erosion and profit shifting. In addition, Australia's transfer
pricing rules together with the general anti‑avoidance rules and the
various information gathering powers already afforded to the Commissioner under
the tax law should, together, provide the Commissioner with sufficient power to
address the risks the DPT is aimed at.[3]
2.7
The Australian Taxpayers' Alliance considered that 'the proposed
legislation was an unideal way to approach' the issue of aggressive tax
avoidance schemes.[4]
2.8
Similarly, the Law Council of Australia noted that:
At a high level, we are concerned about the introduction of
this proposed legislation on the basis that we do not consider it appropriate
in the global context.[5]
2.9
The Minerals Council of Australia were strident in their objection to
the bill:
The DPT is a punitive measure that departs significantly from
the international tax standards. As the DPT currently stands, it will inject
uncertainty and unpredictability into Australia's tax arrangements and impose
ongoing compliance costs to taxpayers investing in Australia and for Australian
based international companies.[6]
2.10
KPMG also cited uncertainty, among other issues, associated with any
introduction of the DPT:
...we note that the DPT is very uncertain in its scope, it does
not deal with the real issues facing transfer pricing and gives significant
implicit discretion to the ATO in an environment which can cause significant
reputational and financial damage to MNEs [multinational enterprises].[7]
2.11
A number of submitters objected to the proposed legislation not
addressing concerns raised previously through the exposure draft consultation
process. For example, The Tax Institute submitted that:
...there was little time to address legitimate concerns of stakeholders
about the proposed legislation. As such, a number of aspects of the DPT have
yet to be completely thought through, which currently represents a significant
overreach that will not necessarily serve to achieved the desired policy
outcomes.[8]
2.12
Similarly, the Corporate Tax Association (CTA) and the Group of 100
(G100) noted that:
...despite the significant concerns raised by the CTA, the G100
and others with the proposed DPT and 100 fold penalties measures, those
concerns remain largely unaddressed and are reflected in the bill.[9]
2.13
However, not all stakeholders were opposed to the introduction of the
diverted profits tax. For example, the Tax Justice Network-Australia submitted
that:
...in dealing with tax cheating by multinational enterprises a
mix of multilateral and unilateral measures are required. This is also the view
of the OECD through the Base Erosion and Profit Shifting (BEPS) project, where
for example it has recommended that countries take unilateral measures to deal
with issues like hybrid mismatches...Reliance on only multilateral measures will
ensure that greater levels of tax cheating will be maintained as there are
foreign jurisdictions that have demonstrated that they are willing to design
their tax laws to assist multinational enterprises in being able to carry out
cross‑border tax avoidance.
...
The Diverted Profits Tax (DPT) is necessary because of the
inadequacy of the OECD BEPS Actions 8, 9 and 10 and proposals on transfer
pricing, and the weak proposals of Controlled Foreign Corporations (CFC) rules
in Action 3.[10]
2.14
Associate Professor Antony Ting also noted that current international
tax rules are ineffective to address base erosion and profit shifting (BEPS)
but:
...the introduction of a DPT as a unilateral measure is a
welcoming step in the right direction in the war against BEPS. The government
should be commended for taking this course of action.[11]
Comparison with the UK DPT
2.15
A number of submissions drew comparisons between the proposed Australian
DPT and its counterpart in the United Kingdom.
2.16
The Australian Taxpayers' Alliance was critical that similar legislation
in the United Kingdom did not result in the application of the DPT on companies
at which it was intended:
The legislation was referred to as a "Google Tax"
in the media as having the aim of making large corporations like Google change
their tax structures and pay more tax. However, it is reported that Google does
not pay the Diverted Profits Tax. Whilst Google has struck a deal to amend its
past returns to pay more tax, this falls primarily outside of the timeframe of
the Diverted Profits Tax.[12]
2.17
By contrast, other submitters considered that the UK DPT has already
yielded some very public results. For example, Associate Professor Antony Ting
believed that the UK experience had been successful in changing the behaviour
of multinational enterprises.[13]
2.18
The Tax Justice Network‑Australia cited an analysis of the UK DPT
by Faccio and Kadet who conclude that:
The initiation of DPT and the changes to royalty withholding
announced in the 2016 U.K. budget have a major impact on the economics of
profit‑shifting structures that require on‑the‑ground sales,
marketing, and other support activities in the U.K. The U.K.'s actions will be
closely examined and may well be followed by numerous other countries feeling
the effects of aggressive profit‑shifting activities.[14]
2.19
Greenwoods & Herbert Smith Freehills, Herbert Smith Freehills and
Professor Richard Vann (G&HSF, HSF and Vann) provided an analysis of 26 common
issues between the UK DPT and the proposed Australian DPT. That analysis ranked
the proposed Australian DPT as more onerous in 14 areas, the UK DPT as more
onerous in three areas and there were nine areas which were comparable between
the two schemes. They concluded that:
The only important substantive issue where the UK is more
onerous than Australia is the lack of a limitation of its DPT to significant
global entities—all the UK eliminates is SMEs as defined in EU law. By
contrast, on major structural issues...Australia is more onerous than the UK...
On the procedural front the UK has an obligation on taxpayers
to notify HMRC [Her Majesty's Revenue Customs] of the potential application of
the DPT (with several exceptions) which Australia does not require. Otherwise,
Australia has the longer limitation period for issuing assessments of 7 years,
compared to 2‑4years in the UK and worst of all prevents the taxpayer
from producing evidence if it does not disclose the evidence to the ATO in the
review period...[15]
Uncertainty in application
2.20
While uncertainty is associated with the introduction of many new laws,
there would appear to be more unease than usual in some sectors about the
proposed DPT. The concerns range from overlaps with existing transfer pricing
rules, whether the DPT was a provision of last resort, and the number of
multinational entities that may be within scope.
2.21
In the context of reconstructing transfer pricing arrangements, KPMG
indicated that it considered the reconstruction power embodied in section 815‑130
of the Income Tax Assessment Act 1997 to be a much better power than the
proposed DPT.[16]
2.22
Similarly, The Tax Institute submitted that the objects underlying the
introduction of the DPT could be addressed by the application of transfer
pricing rules and strengthening the Commissioner's power to gather relevant
information that the Commissioner believes is located outside Australia
(through section 264A of the Income Tax Assessment Act 1936).[17]
2.23
The Tax Institute raised concerns about 'where the DPT sits on the
hierarchy of tax law provisions that may apply to a significant global entity,
such as the transfer pricing rules'.[18]
2.24
Raising similar concerns about when the DPT would be used, the
Australian Financial Markets Association (AFMA) contend that the legislation
should explicitly include the requirement to consider the operation of the
ordinary provisions of the income tax law as an appropriate safeguard.[19]
2.25
Similarly, Chartered Accountants Australia and New Zealand (CAANZ) considered
that the legislation 'should explicitly state that the DPT is a provision of
last resort'.[20]
2.26
The CTA and G100 emphasised the need to provide certainty as to where
the line between the two provisions sits:
Ensuring the DPT is a provision of last resort is also
crucial in the context of deterring the use of the DPT as leverage during
transfer pricing disputes. The close resemblance between the proposed DPT and
the transfer pricing provisions must not give rise to subjective assessments of
a taxpayer's behaviour taking precedence over whether the taxpayer in fact has
a reasonably arguable position under the existing law.[21]
2.27
The CTA and G100 also highlighted that compliant taxpayers may be
unnecessarily caught up in the application of the DPT in its current form:
Without any legislative safeguard, corporates will have no
choice other than to seek clarity on whether the proposed DPT applies to such
transactions, which will come with unnecessary compliance costs and the use of
limited internal resources.[22]
2.28
KPMG raised concerns about the potential application of the DPT to many
more significant global entities:
We are told that the DPT could potentially apply to 1600
taxpayers with 8% or 128 being high risk...
What is interesting is the inherent greyness in its potential
application—for 92% of the 1600, who do not fall into the high risk category,
but are low or medium risk—one cannot simply determine that the rule does not
apply.[23]
2.29
Indeed, The Tax Institute noted that the introduction of the Multinational
Anti-Avoidance Law (MAAL) resulted in 175 multinational entities having discussions
with the ATO, compared to the initial estimate of 100 multinational entities
flagged in the EM for that bill.[24]
As such, the DPT may affect more multinational entities than indicated, thereby
resulting in greater compliance costs for business than estimated in the 2016‑17
Budget.
2.30
Noting the uncertainty associated with the introduction of the DPT, CAANZ
proposed:
...an extensive post‑implementation review by relevant
Parliamentary committees within three years of the DPT's effective implementation
date.[25]
Tests for determining DPT
application
2.31
A number of stakeholders commented on the tests for determining when the
DPT should be applied.
$25 million income test
2.32
The Tax Justice Network‑Australia noted that the UK DPT does not
have a de minimis threshold and believed that the $25 million threshold of
Australian turnover is on the 'high side'. However, they accepted that this
threshold aligns with a number of existing thresholds.[26]
2.33
The Tax Justice Network‑Australia welcomed that:
...the $25 million turnover test will not apply if it is
reasonable to conclude that the relevant taxpayer, or another entity is a
significant global entity because it is a member of the same global group as
the relevant taxpayer, has artificially booked turnover outside Australia.[27]
Foreign tax test
2.34
Competing views were expressed in relation to the 20 per cent tax
reduction threshold. The CTA and G100 pointed out that:
The sufficient foreign tax test, although intended to operate
as a carve out, has the potential to impact all transactions involving a
foreign related entity in a jurisdiction that imposes corporate income tax at a
rate less than 24%. This essentially means that countries that are trading
partners, rather than tax havens, will be tarred with the DPT brush.[28]
2.35
By contrast, the Tax Justice Network‑Australia was concerned that
the 20 per cent threshold was too high:
...a multinational enterprise with profits of $100 million
in Australia would be permitted to avoid up to $20 million before being caught
by the DPT. Given the threshold test does not require the ATO to take action,
but allows them to, provided they have cause to believe the test of the
transaction lacking economic substance applies, a lower threshold allows the ATO
more ability to take action.[29]
2.36
The Tax Justice Network‑Australia contended that a 10 per cent tax
reduction would be more suitable, given that the ATO would still need to assess
the amount of revenue recovered against the cost of the ATO taking action.[30]
Economic substance test
2.37
The Minerals Council of Australia was concerned about the subjective
nature of the 'economic substance' concept:
The lack of a clear objective test to determine sufficient
economic substance means that the DPT can apply to legitimate commercial
transactions.
The use of subjective and ambiguous terms such as 'reasonably
reflects the economic substance' with minimal legislative or objective
reference points or precedent will result in unrestrained application and will
only create significant uncertainty, a large compliance burden and a potential
impact that will affect the attractiveness of Australia as a place to invest.[31]
2.38
However, the Tax Justice Network‑Australia indicated its support for
the economic substance test:
TJN‑Aus agrees that the determination of whether there is
insufficient economic substance be based upon whether it is reasonable to
conclude based on the information available at the time to the ATO that the
transaction(s) was designed to secure the tax deduction.[32]
DPT assessments and review process
2.39
A key issue for most stakeholders was the relative power provided to the
Commissioner in raising DPT assessments and the limitations being placed on
review mechanisms.
2.40
The Minerals Council of Australia were scathing in their assessment of
the administrative process:
The DPT's administrative arrangements are harsh and without
precedent. It lacks procedural fairness by handing extraordinary new powers to
the ATO without adequate oversight or protections for taxpayers. The DPT allows
the ATO to effectively impose penalty assessments without meeting a reasonable
standard of evidence before doing so.[33]
2.41
Concerns were also raised about ATO resourcing and the need to implement
processes to give taxpayers clarification:
...a process for "DPT clearance" with set timeframes
enshrined in the law has some merit as an incentive for taxpayers and the ATO
to accelerate resolution of matters or provide confirmation that the DPT does
not apply to an arrangement.[34]
2.42
In relation to the proposed seven year timeframe to raise an assessment,
the Tax Justice Network Australia agreed that a DPT assessment should:
... be applied up to seven years after the taxpayer has lodged
their income tax return for the relevant year, consistent with the current
review period for transfer pricing matters.[35]
2.43
However, G&HSF, HSF and Vann noted that:
...the DPT is not a transfer pricing measure per se...,
and as the lapse of the general Part IVA limitation period of four years does
not preclude the ATO making a transfer pricing adjustment within seven years
under the transfer pricing rules, it is unclear why this particular provision
in Part IVA requires a different period.[36]
2.44
The Australian Taxpayers' Alliance was critical of the proposed approach
to make DPT assessments payable within 21 days and before any review was undertaken:
...the pay up first then prove your innocent later approach
risks hurting the operations of businesses acting legitimately within both the
letter and the spirit of the law...[37]
2.45
Concerns were raised that this 'pay up first' approach might undermine the
goodwill of the Australian Taxation Office.[38]
However, a DPT is intended to only be raised after consideration has been given
to the operation of the ordinary provisions of the income tax law. As such,
significant global entities will only fall under the DPT in circumstances where
they do not cooperate with the ATO.[39]
2.46
The CTA and G100 noted that the inclusion of the DPT within the Part IVA
anti-avoidance provisions would essentially shield the DPT from being
overridden by tax treaties, and, by association, access to mandatory binding
arbitration:
Allowing DPT assessments to be excluded from binding MAP
[Mutual Agreement Procedure] arbitration will create a scenario under which the
Australian Taxation Office (ATO) could challenge standard transfer pricing transactions
under the DPT and circumvent the possibility of binding MAP arbitration to
resolve the dispute...it is simply inappropriate for binding MAP arbitration not
to be available in the context of what will essentially be cross border
transfer pricing matters.[40]
2.47
The importance of tax treaties was also raised by CAANZ:
The interaction of the DPT with tax treaties, in particular
practical topics such as MAP processes, needs to be discussed in the DPT
commentary considered by parliamentarians, not just in supplementary ATO
guidance.[41]
2.48
The Minerals Council of Australia raised concerns about restrictions on
the use of evidence:
The DPT proposes to impose strict rules that would deny
evidence being admitted to court in defence of a taxpayer – unless the Commissioner
approves.[42]
2.49
On this issue, the Law Council of Australia submitted that:
...the proposed restricted DPT evidence provisions...are
inappropriate and should be limited, to align with section 262A of the Income
Tax Assessment Act 1936, to application only where the ATO has sought
information and the relevant party has not complied.[43]
2.50
G&HSF, HSF and Vann considered that the restricted evidence
provision:
...is another departure from normal practice internationally
and will inevitably produce an unfair balance between tax administration and
taxpayer contrary to the evident intent of the OECD Transfer Pricing
Guidelines...[44]
2.51
Restrictions on the use of evidence seek to overcome, in part, the
information asymmetry about profit shifting schemes between multinational
enterprises and the ATO. While multinationals can choose how they structure
their international arrangements and apply an arm's length analysis, sufficient
information is required by the ATO to gain an understanding of why certain
commercial arrangements have been entered into.
Tensions between the ATO and multinational enterprises
regarding the sharing of information have been highlighted publicly by the
Commissioner at Senate Estimates:
These companies have pushed the envelope on reasonableness.
They play games. They string us along. They believe we can be stooged. However,
enough is enough and no more of this. We will be reasonable with those that
genuinely cooperate, but we will now take a much harder stance on those who do
not.[45]
2.52
In its analysis of the information provision issue, KPMG concluded that:
...the provision of information by an MNE in a transfer pricing
dispute is complex and full of tensions. Sometimes a revenue authority will not
appreciate what is readily available and what is not. Sometimes they will not
have a clear understanding of what they want and why they want it. Sometimes
there will be simply a quest for greater and greater detail to draw greater and
greater distinctions or comparisons. That is not to say that MNEs will never
undertake a deliberate strategy of obfuscation and a lack of cooperation, but
the matter is not simple. The fear is that in the future the DPT will be used
as an unfair strategic tool in this complex world.[46]
2.53
The ATO has sought to implement a more constructive and cooperative
based approach to stakeholder engagement. Despite this, there would appear to
be multinationals that are still reluctant to provide the information necessary
for the ATO to verify their claims. In these circumstances, it is appropriate
that, during an appeal following a DPT assessment, multinationals are only
allowed to draw on evidence provided to the Commissioner before the end of the
period of review.
2.54
Concerns about the discretion to undertake DPT assessments and the
review process were not shared by all stakeholders. The Tax Justice Network‑Australia
supported the proposed approach to issuing DPT assessments and the review
process:
TJN-Aus supports that the DPT will impose a liability when an
assessment is issued by the ATO (so it will not operate on a self‑assessment
basis) and that it will require upfront payment, which can only be adjusted
following the successful review of the assessment. We also support that the DPT
will put the onus on taxpayers to provide relevant and timely information on
onshore related party transactions to the ATO to prove why the DPT should not
apply.[47]
Implementation by the Australian
Taxation Office
2.55
A number of stakeholders discussed the implementation of the DPT and the
development of guidance material by the ATO.
2.56
CAANZ argued more guidance and examples were needed than provided for
the MAAL:
Some practical examples of what transactions the ATO think
might be 'DPT out of scope' would also be helpful....
Given that the DPT is more about changing behaviours than
raising tax revenue, practical guidance on how long affected taxpayers have to
restructure would be most welcome.[48]
2.57
KPMG noted the development of a Law Companion Guide would reduce the
potential gap between how the law is intended to apply when first legislated
and how it is actually applied by the ATO. They also noted, however, that the
manner in which the law could be applied may change over time and advocated for
the Law Companion Guide to articulate the process of evaluation of whether the
ATO should apply the DPT or not in a particular circumstance.[49]
2.58
To counter the uncertainty contained within the DPT provisions and
improve the process of evaluation, KPMG advocated for the establishment of a
specific DPT Review Panel consisting of a combination of ATO and independent
experts:
Such a DPT Panel would make an evaluation of whether a DPT
assessment should be issued, before the issue of such an assessment. This would
take away the ability of the ATO to use the DPT as a strategic or tactical
instrument in an unreasonable manner without emasculating the provision from an
administrator's perspective.
...
This would give appropriate gravity to a DPT assessment. It
would contribute to undermining both the argument and fear that the DPT was
being used in an unreasonable strategic manner by the ATO.[50]
2.59
In making this suggestion, KPMG recognised that embodying the
establishment of a dedicated DPT review panel in legislation is difficult.[51]
2.60
The Minerals Council of Australia also supported the establishment of an
independent DPT panel to provide procedural fairness:
An independent panel of taxation experts should be
established to determine whether an arrangement ought to be subject to the
punitive treatment under the DPT. This is critical to ensuring that there is
some form of procedural fairness in the application of the law.[52]
2.61
The Minerals Council of Australia went on to advocate for the embedding
of such a panel into legislation, as the UK has done with the General Anti‑Avoidance
Rules (GAAR) Advisory Panel.[53]
2.62
Similarly, CAANZ recommended that:
...the ATO establishes a limited life DPT sub‑group
within its General Anti‑Avoidance Rules (GAAR) Panel to provide
assistance on the administration of the DPT to ensure applications are
objectively based and there is a consistency in approach.[54]
Committee view
2.63
The committee acknowledges that submissions raised a number of concerns
about the extent of Australia's multinational tax avoidance provisions and, in
particular, the potential ramifications arising from the unilateral
implementation of a DPT in Australia.
2.64
Stakeholders advocated for the explicit incorporation of the DPT as a
provision of last resort to be included in the legislative instrument. While
this approach would give comfort to multinationals, the committee considers
that this may reduce the flexibility that the Commissioner could use in the
application of the DPT, especially where significant global entities are not
being compliant and not providing the information required to properly assess their
tax obligations.
2.65
While extensive discretionary powers have been afforded to the
Commissioner in relation to undertaking DPT assessments, the committee feels
that this is a necessary step to promote greater compliance and deter
significant global entities from gaming the system. The committee has
confidence that the Commissioner will take a measured approach in exercising
these powers and will not use them unnecessarily nor burden significant global
entities with excessive compliance costs.
2.66
In regards to concerns raised by stakeholders about possible uncertainty
in the implementation phase, the committee believes that it is up to the ATO to
consider whether establishing a DPT review panel might provide assistance in
the application of the DPT.
2.67
Given the importance that the government has placed on combating
multinational tax avoidance, the committee considers that the DPT, in
conjunction with other anti-avoidance measures, is a welcome and necessary
addition to the suite of measures available to tax administrators. Indeed, the
purpose of many of the anti‑avoidance measures introduced recently,
including the DPT, is to encourage multinational firms to structure their
activities and be captured by the ordinary income tax framework, rather than be
subject to the punitive arrangements set out in anti-avoidance provisions.
Increased penalties for significant global entities
2.68
Relatively few submissions discussed increased penalties for significant
global entities.
2.69
The CTA and G100 considered that the proposed 100 fold penalty increase
for significant global entities should be limited to multinational companies
that opt out of their reporting obligations.[55]
2.70
AFMA was concerned about the discretion given to the Commissioner
regarding the remission of FTL penalties. In particular, AFMA noted that there
may be circumstances where taxpayers are not aware of their compliance
obligations and should be protected from the imposition of material penalties.
In these circumstances, the taxpayer should be offered a reasonable period to
lodge an outstanding form:
For example, where the SGE [significant global entity] has
lodged accounts with ASIC that the SGE believes qualifies as "general
purpose financial statements" then the SGE may have formed the reasonable
view that there is no further requirement to lodge accounts with the ATO. To
the extent that the ATO takes a differing view...then technically the SGE has
failed to lodge. A positive notification of the compliance obligation, coupled
with a reasonable timeframe to remediate, is an appropriate safeguard in such a
circumstance.[56]
2.71
AFMA also raised concerns about the discretion given to the Commissioner
for the remission of FTL penalties, particularly given the material nature of
FTL penalties for significant global entities and there is no compulsion on the
Commissioner to adhere to the relevant Practice Statement and no remedy
available for affected taxpayers. In addition, AFMA contended that the amount
of the penalty should be a relevant factor in considering whether a penalty
should be remitted.[57]
2.72
The Tax Justice Network‑Australia was supportive of ensuring that
the penalties are adequate to remove the profit from the crime:
Given the resources that significant global entities usually
have at their disposal, they have less excuse not to lodge accurate documents
to the Commission of Taxation on time than smaller businesses do...[58]
2.73
Some submissions argued that the increase in penalties should only apply
to documents relevant to tax affairs, not those which assist the efficient
operation of the tax system. AFMA, for example, said:
...the compliance obligations to which the enhanced penalties
could potentially apply should be split between those which are indicative of
obfuscation/non‑cooperation...and those which do not relate to the
taxpayer's own obligations but rather enhance the operation of the tax system.[59]
Committee view
2.74
While noting the issues raised by submitters, the committee considers
that the proposed level of penalties for significant global entities will
address concerns about the inadequacies of the current regime and ensure that
penalties are commensurate with the gravity of reporting offences. No matter
how large or important a business is, there can be no excuse for inaccurate or
delayed tax reporting and administration by large multinationals.
Transfer pricing guidelines
2.75
Only two submissions mentioned the updated transfer pricing rules.
2.76
KPMG supported the government's adoption of the OECD BEPS Action Plan
changes that reset the transfer pricing rules.[60]
2.77
CAANZ considered the proposed commencement of the new transfer pricing
rules in relation to income years starting on or after 1 July 2016 to be
retrospective. CAANZ advocated for a prospective application of the new
guidelines given that ATO guidance would need to be developed on how the OECD's
principles would be implemented in an Australian context.[61]
Committee view
2.78
The committee considers that it is important to keep Australia's
transfer pricing guidelines in line with best international practice by
adopting the latest OECD recommendations. Given that the recommendations were
released in 2015, the committee also considers that the application date from 1
July 2016 is appropriate and should be maintained.
Recommendation 1
2.79
The committee recommends that the bills be passed.
Senator Jane Hume
Chair
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