OECD releases Discussion Draft on the transfer pricing of financial transactions
An Australian perspective - 17 July 2018
On 3 July 2018, the OECD released a Discussion Draft on the transfer pricing aspects of financial transactions.
The Discussion Draft follows the work previously undertaken by the G20/OECD in relation to Actions 8-10 of the Base Erosion & Profit Shifting (BEPS) Action Plan on aligning transfer pricing outcomes with value creation. The Discussion Draft does not, at this stage, reflect a consensus position of the governments involved but is designed to provide substantive proposals for further review and comment. The Discussion Draft is welcome additional guidance from the OECD as to how taxpayers may approach a range of intra-group financing arrangements.
This Tax Insight provides a summary of the OECD Discussion Draft, and provides an Australian perspective in the context of intra-group financing being considered as one of, if not the, most significant risk to the Australian corporate tax base, as identified by senior Australian Taxation Office leadership. It also considers the Discussion Draft against the backdrop of Australia’s transfer pricing provisions, the Chevron decision ( FCAFC 62), and various materials issued by the ATO.
Published: July 2018