Transfer pricing laws introduced into Parliament
Laws introduced into the Parliament today will ensure that multinational companies pay their fair share of tax, said Assistant Treasurer David Bradbury.
The Tax Laws Amendment (Cross-Border Transfer Pricing) Bill (No. 1) 2012 ensures the effectiveness of transfer pricing rules contained in Australia's tax treaties and incorporated into Australia's domestic law.
"Transfer pricing rules are critical to the integrity of the tax system," said Mr Bradbury. "Related party cross-border trade was valued at approximately $270 billion in 2009, representing about 50 per cent of Australia's cross border trade flows.
"Multinational companies seeking to shift profits within the group to avoid paying tax, can pose a serious threat to Australia's revenue.
"Having a robust set of transfer pricing rules makes sure that Australia's revenues are protected and large multinational companies pay their fair share of tax."
Consistent with the announcement made by the then Assistant Treasurer in 2011, these changes apply to income years commencing on or after 1 July 2004, being the first income year following Parliament's last statement demonstrating its long held understanding that the law operated in this way.
24 May 2012