Australia - Discussion Paper on review of tax arrangements applying to permanent establishments released by the Board of Taxation

Tax Insights ()

As part of the package of on-going reforms of the transfer pricing rules in Australia (see PKN Alert dated 2 November 2011), the Government on 24 May 2012 commissioned the Board of Taxation (the BoT) to examine the implications of Australia adopting the authorised OECD approach (AOA) to the attribution of profits to permanent establishments (PEs). Australia's PE attribution rules currently allocate actual income and expenses to parts of the enterprise on a "single entity basis", rather than hypothesising the PE as a functionally separate entity under the AOA.