Our latest insights

On 9 August 2024, the ATO sought to appeal a decision exempting PepsiCo from RWHT, highlighting its focus on taxing embedded royalties, IP, and applying DPT.

The ATO has finalised PCG 2024/1, a framework to assess risk of ATO applying anti-avoidance or transfer pricing rules to intangible assets.

This year’s Federal Budget announced a raft of tax changes including Stage 3 tax cuts, extending the instant asset write-off, tax incentives as part of the Future Made in Australia package and changes to the foreign resident capital gains tax regime, among others.

STAI, a SingTel subsidiary, lost its court appeal, highlighting ATO’s focus on tax avoidance. STAI owes ATO $268m in tax and $125m in penalties due to debt deductions. The court found STAI paid excessive interest, benefiting SingTel.

Tax governance is crucial for all taxpayers. Understanding and implementing effective tax governance practices is key to managing tax risks and meeting ATO expectations.

The ATO has been undertaking assurance reviews as part of its Tax Avoidance Taskforce since 2016. These reviews are designed to provide assurance to the Government and the business community that taxpayers are meeting their tax obligations.

PepsiCo appealed a court decision that found it owed the ATO AUD 3.6m in royalty withholding tax for FY 2018 and 2019.

With environmental, social and corporate governance (ESG) and sustainability front of mind for all organisations and reporting requirements on the horizon, it’s important to understand what tax obligations are at play. As the ATO focuses on transparency and governance, it’s important to ensure tax obligations are appropriately incorporated in policies, frameworks, controls, and these are tested to ensure that the business is operating in line with the Group’s tax risk appetite.

As part of the recently introduced Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023 in Australian Parliament, the Federal Government has released an Exposure Draft dealing with Multinational tax transparency.

The ATO has released the revised Draft Practical Compliance Guideline PCG 2023/D2, outlining the compliance approach to intangibles arrangements involving international related parties, addressing the tax issues associated with restructures (“migration”) or mischaracterisation of Australian activities in connection with intangible assets.

In an increasingly digitised global world, technology is omni-present, transcends geographic boundaries, and influences every aspect of 21st century life. With this rapid change, invisible assets, or intangible assets (“intangibles”) are progressively more important value drivers for many Multinational Enterprises (MNEs). These intangibles have become the focus of tax controversy worldwide.