Senate
Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017
Diverted Profits Tax Bill 2017
Revised Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)This explanatory memorandum takes account of amendments made by the House of Representatives to the Bill as introduced.
ToonenaAustralia , CCPR/C/50/D/488/1992, UN Human Rights Committee (HRC), 4 April 1994.
The Government announced on 19 December 2016 that the value of a Commonwealth penalty unit would increase from $180 to $210, with effect from 1 July 2017.
See, 'Aligning Transfer Pricing Outcomes with Value Creation' Action 8-10: 2015 Final Reports, page 9 .
OECD/G20 BEPS Explanatory Statement (2015).
OECD Action 11 Final report (2015), page 15.
Income tax: cross border profit allocation Review of transfer pricing rules & Consultation Paper 1 November 2011.
http://www.treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2011/Transfer%20Pricing%20Rules/Key%20Documents/PDF/Review_of_transfer_pricing_rules_CP.ashx.
The legislation was a two-stage process with the introduction of Tax Laws Amendment (Cross-Border Transfer Pricing) Act (No. 1) 2012 (the 2012 reforms) and the Tax Laws Amendment ( Countering Tax Avoidance and Multinational Profit Shifting ) Act 2013 (the 2013 reforms).
See, subsection 815-135(2) of the ITAA 1997 which requires that for the purposes of Subdivision 815-B the arm's length principle should be worked out and identified so as best to achieve consistency with the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.
See, 'Aligning Transfer Pricing Outcomes with Value Creation' Action 8-10: 2015 Final Reports, page 9.
Note, section 815-235 of the ITAA 1997 requires that when interpreting the arm's length principle in relation to permanent establishments, it is to be interpreted with reference to the Model Tax Convention on Income and on Capital and its Commentaries, as adopted by the Council of the Organisation for Economic Cooperation and Development and last amended on 22 July 2010, to the extent that document extracts the text of Article 7 and its Commentary as they read before 22 July 2010.
Committee Hansard , Additional Estimates, 10 February 2016, p. 66.
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