Australia’s new transfer pricing laws overlap the thin cap rules: challenges for taxpayers

By Jock McCormack

The overlap of Australia’s new transfer pricing laws with the thin capitalisation rules is causing challenges and likely duplication of analysis for taxpayers — particularly for the arm’s-length amount-of-debt test.

Australia legislated comprehensive new transfer pricing laws in 2012 and 2013. These laws were passed in two instalments: Subdivision 815-A, dealing with assessing powers under the equivalent of our double tax agreements (DTAs) and retrospective to 1 July 2004, and Subdivisions 815-B to D, which were broader (applying to both DTA and non-DTA circumstances) and of prospective effect from 1 July 2013. In addition, Subdivision 284–E of Schedule 1 of the Taxation Administration Act 1953 contains specific transfer pricing documentation requirements.

The new transfer pricing laws were largely introduced as a response to the commissioner of taxation’s loss in the full federal court decision in Commissioner of Taxation v SNF (Australia) Pty Ltd (2011). In that decision, the court rejected several of the commissioner’s fundamental technical arguments — not least, it rejected the legitimacy of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations as approved by the council of the OECD…

Click on the link below to read the rest of the DLA Piper briefing.

Sign in or Register to continue reading this article

Sign in


It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer


Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.


Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.


Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from DLA Piper

View more briefings from DLA Piper

Analysis from The Lawyer

View more analysis from The Lawyer


3 Noble Street

Turnover (£m): 1,566.29
No. of lawyers: 3,961 (UK 200)
Jurisdiction: global
No. of offices: more than 75
No. of qualified lawyers: 542 (International 50)
No. of partners: 142.6