Public comments on the draft guidance must be received by June 18, 2021.
The Australian Taxation Office (ATO) has issued draft guidance to help businesses comply with their income tax obligations in relation to international arrangements connected with intangible assets.
The draft guidance – issued on May 21 – sets out ATO’s compliance approach to international arrangements connected with the development, enhancement, maintenance, protection, and exploitation (DEMPE) of intangible assets, and involving a migration of intangible assets (“intangibles arrangements”).
This Guideline applies to Intangibles Arrangements and focuses on tax risks associated with the potential application of the transfer pricing provisions. It also focuses on other tax risks that may be associated with Intangibles Arrangements, specifically the withholding tax provisions, capital gains tax, capital allowances, the general anti-avoidance rule, and the diverted profits tax. All of these tax risks are relevant to our compliance approach and are collectively referred to as ‘compliance risks’ in this Guideline.
Businesses can use the framework set out in the guidance to understand the compliance risks that may be presented by intangibles arrangements; the type of analysis ATO undertakes to assess compliance risks, and the documents and evidence ATO expects businesses to have and maintain to substantiate their intangibles arrangements.
Public comments on the draft guidance must be received by June 18, 2021.
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