News Asia/Pacific
Australia Reviews International Arrangements that Mischaracterise Australian Activities Connected with the DEMPE of Intangibles
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January 23rd, 2020
The Australian Taxation Office (ATO) announced that it is reviewing international arrangements that mischaracterise Australian activities connected with the development, enhancement, maintenance, protection and exploitation (DEMPE) of intangible assets. Concerns are that these arrangements may be non-arm's length or structured to avoid tax obligations, resulting in inappropriate outcomes for Australian tax purposes.
Australian Taxation Office Provides Further Draft Guidance for Hybrid Mismatch Rules
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November 27th, 2019
The Australian Taxation Office (ATO) has published draft Taxation Determination TD2019/D12, titled as “ Income tax: is section 951A of the US Internal Revenue Code a provision of a law of a foreign country that corresponds to section 456 or 457 of the Income Tax Assessment Act 1936 for the purpose of subsection 832-130(5) of the Income Tax Assessment Act 1997? ” The draft provides guidance on the application of Australia’s hybrid mismatch rules in relation to the US ‘GILTI rule’.
It outlines why the ATO believes that section 951A of the US Internal Revenue Code (IRC) does not correspond to section 456 and 457 of Australia’s controlled foreign company regime for the purpose of applying Australia’s hybrid mismatch rules.
Australian Board of Taxation Consulting on Corporate Tax Residency
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September 13th, 2019
The purpose of the review is to ensure the corporate tax residency rules are operating appropriately in light of modern, international, and commercial board practices and international tax integrity rules.
In particular, the Board is asked to consider whether the existing rules:.
Australian Global Resources Company To Pay $175 Million In Tax Dispute
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July 4th, 2019
BHP Group, the third-largest producer of the steel-making ingredient agrees to pay AUD250M (U$175M) to State Australia (Western) tax authority to end a dispute over royalties paid on iron ore shipments sold through its Singapore marketing hub.
The accusations of having underpaid iron ore royalties .
Australia Publishes Joint Administrative Approach With New Zealand On Tie Breaker Rule
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June 11th, 2019
The Australian Taxation Office (ATO) has announced the publication of a joint administrative approach with New Zealand Inland Revenue (IR) on the application of the new treaty tie-breaker rule for non-individual taxpayers introduced by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("Multilateral Instrument" or "MLI") that will swiftly implement a series of tax treaty measures to update international tax rules and lessen the opportunity for tax avoidance by multinational enterprises.
The administrative approach of Australia and New Zealand’s MLI .
Australian Tax Authority Extends Data Matching To Cryptocurrency To Assist Tax Compliance
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May 2nd, 2019
The Australian Taxation Office (ATO), on April 30, 2019, announced that they were collecting trading records from designated service providers (DSPs) to ensure that cryptocurrency traders were presenting accurate income statements and not cutting out on taxes. Therefore, Australians trading in cryptocurrency may soon get a call from the Australian Taxation Office if its new data-matching program flags a problem.
Australia Publishes Synthesized Texts Of Tax Treaties With Japan, New Zealand, Poland, And The UK As Impacted By The BEPS MLI
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February 26th, 2019
The Australian Taxation Office (ATO) published the synthesized texts of the OECD multilateral instrument and Australia’s income tax treaties with Japan, New Zealand, Poland, and the United Kingdom as impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
The Effective Dates of the MLI Provision .
Leading Global Resources Company Settles Australian Transfer Pricing Dispute for $386 Million
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November 20th, 2018
BHP Billiton has reached an agreement with the Australian Taxation Office (ATO) to settle a transfer pricing dispute relating to its marketing operations in Singapore. The settlement fully resolved the longstanding dispute between BHP and the Australian Taxation Office for the period 2003-2018.
Australia Consults On Debt Equity Rules And Transfer Pricing Rules Interaction
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November 1st, 2018
The Australian Taxation Office (ATO) has launched a public consultation on a draft taxation determination (TD 2018/D6) concerning whether the debt and equity rules in Division 974 of the Income Tax Assessment Act 1997 can limit the operation of the transfer pricing rules in Subdivision 815-B of the Income Tax Assessment Act 1997.
Illustrations .
Australian Parliament Passes Legislation To Bring Forward Scheduled Tax Relief for Small and Medium Businesses
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October 18th, 2018
Treasury Laws Amendment (Lower Taxes for Small and Medium Businesses) Bill 2018 was passed by both houses of the Australian parliament. The Bill accelerates the reduction of income tax rates for incorporated and unincorporated small businesses.
Australian Tax Court Decision On Deemed Source Rule In Australia-India Treaty
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October 16th, 2018
The Federal Court of Australia handed down its decision in Satyam Computer Services Limited v Commissioner of Taxation, which was involved in the “deemed source” rule in the Australia-India double tax treaty.
Background .
Australia Updates Mutual Agreement Procedure Guidance
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October 9th, 2018
The Australian Tax Authority (ATO) has reviewed and updated the mutual agreement procedure to reflect the OECD’s Action Plan on Base Erosion and Profit Shifting (BEPS). The updated guidance caters more detailed information as followed:
Information requirements for MAP requests.
ATO Publishes Practical Compliance Guideline On Diverted Profits Tax
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September 27th, 2018
The Australian Tax Office (ATO) published the final form of the Practical Compliance Guideline (PCG) 2018/5 Diverted Profits Tax (DPT) and Law Companion Ruling (LCR) 2018/6 Diverted profits tax as complements to the administrative guidance ATO provided in Law Administration Practice Statement (PSLA) 2017/2 Diverted profits tax assessments.
Background to DPT .
New Zealand Seeks For Public Feedback On Draft BEPS Guidance
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August 28th, 2018
New Zealand reached out to the public for feedback on draft BEPS Guidance material issued at the same day to improve the content and presentation of the material. Based on the comments received, a clear and understandable guidance will be finalised in early 2019.
Amendmend to DTA Between New Zealand And Hong Kong Enters Into Force
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August 14th, 2018
An amendment to the Double Tax Agreement (DTA) between New Zealand and Hong Kong entered into force. This amendment widens the exchange of information provisions for the purposes of eradicating tax evasion and avoidance.
New Zealand Finalizes MNE Tax Avoidance Rules
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June 28th, 2018
The Inland Revenue in New Zealand announced the third reading of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill had been passed in Parliament, which contains measures to prevent multinational companies from avoiding tax by shifting profits out of New Zealand.
Enforcement of the Bill being Next Week .
Australia Publishes Guidance For Large Public And Multinational Businesses On Assessing Tax Governance
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June 26th, 2018
The Australian Taxation Office (ATO) issues practical guidance to assist large public and multinational businesses in understanding how tax authority rates tax governance when applying justified trust methodology.
Definition of Tax Governance .
Australia Consults The Public On Restructures of Hybrid Mismatch Arrangements
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June 26th, 2018
Australia government released its draft Practical Compliance Guideline (PCG) 2018/D4 Part IVA of the Income Tax Assessment Act 1936 and Restructures of Hybrid Mismatch Arrangements. The Australian Taxation Office (ATO) has invited all interested parties to comment on this draft law by 20 July 2018.
Australia Finalises Rules On Reporting Foreign Exchange Gains And Losses In Local File
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June 21st, 2018
The Australian Taxation Office finalised the rules for reporting foreign exchange gains and losses in Local File – Part A in the second year of reporting, after considering the feedback from consultation in 2017.
Local File Transaction Categories involved .
Australia To Kick Off Corporate Tax Cut Plan
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May 31st, 2018
It has been confirmed by Mathias Cormann, the Finance Minister in Australia, that a new company tax legislation and an income tax package will be submitted to the Senate before parliament rises in late June. Under the new package, the government proposes to cut the company tax rate from 33% to 25%.

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