Transfer Pricing & International Tax Aspects From The Federal Budget 2021-2022

Posted By Tax & Legal

17/05/2021

This report details key incentives from the Budget 2021-22 that could directly or

indirectly impact current International Tax and Transfer Pricing structures and planning.

Download the full PDF Report here

 Inside you will find

1.0 Attracting and retaining innovative business activities to Australia

1.1 Introduction of a Patent Box

1.2 Digital games tax offset

1.3 Self-assessment of the treatment of Intangible Assets

2.0 Cross border tax coherency, streamline foreign investments and transparency

2.1 Fast-tracking foreign investment application process

2.2 Amendments to Taxation of the Financial Arrangements (TOFA) regime

2.3 Unwinding of the Offshore Banking Unit (OBU) regime

2.4 Broadening of corporate tax residency rules

2.5 Increased international tax transparency

FROM THE REPORT

The take-aways for businesses from the Government’s 2021-2022 Federal Budget are the promise to implement reforms, incentives, and policies to achieve a more dynamic, productive, competitive, and flexible economy.

The two essential areas that relate to Transfer pricing and International tax are firstly incentives to attract more innovative business activities and further entice the benefits of these to stay on Australian soil in the longer term.

Secondly, streamlining some of the current administrative compliance obstacles to ensure Australia appeals to international businesses, and is a competitive and winning option for foreign investments.

Whilst these Budget incentives should be applauded for measurements to assist Australian businesses back on track after a horrendous year with pandemic, lockdowns, and natural catastrophes, it is still important for Australian inbound and outbound multinational enterprises to stay put with statutory obligations, filing arm’s length tax returns and complying with the comprehensive annual transfer pricing documentation requirements.

Although the Australian Government has acted swiftly to support Australian businesses, the Government have massive debts post COVID-19. Given that the ATO is already perceived as one of the most aggressive and advanced revenue authorities in the world, we expect additional targeting of multinationals to recoup some of the governmental investment in Australian businesses

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