Australia: Revised draft determination released on deductibility of support payments to subsidiaries

Tax Insights ()

The Australian Taxation Office (ATO) has released a revised draft Taxation Determination TD 2014/D7 outlining its views on whether certain payments described in the ruling as capital support payments made by an Australian parent company to its subsidiary are deductible. TD 2014/D7 is relevant to any Australian company that makes intra-group payments to a subsidiary company located outside of Australia.

This draft tax determination (the revised draft TD) contains substantial revisions to the original draft Taxation Determination TD 2013/D3, which was released by the ATO in April 2013. The revised draft TD now includes specific reference to Australia transfer pricing rules and a range of additional examples that differentiate arrangements that may be capital in nature or deductible. A copy of the revised draft TD is available on the ATO website.