Transfer pricing minutes, August 2009

9. Other Business

There were discussions on two issues:

1. TD2008/20

The determination was discussed by the industry members with the following major points raised:

• members need more time to review the response to Damian Preshaw at KPMG to provide further comment and focussed questions.
• Division 13 can apply to 'Equity Interests' raising new issues.
• the scope of Division 13 does appears to be increased under this TD
• further discussion was aimed at identifying the specific concern arising in relation to the TD. The following points were noted:
• there is nothing in any of the current Rulings which addresses equity issues like capital gains and dividends.
• the equity reference was very broadly expressed
• what does Division 13 have application to in the TD and how? If it does apply is it any practical consequence?

2. PSLA 2008/18 - Penalties

The PS LA was discussed by the industry members with the following major points raised:

• In relation to imposing penalties in what circumstances would this apply?
• Penalties can be applied in TP cases so why raise it in this PS LA.
• If penalties are imposed where there is a TP adjustment then they are imposed under specific provisions and this PS LA appears to be a change in practice.

As a result of the discussion and points identified it was noted that it is good practice for industry to consult with the TPP in the first instance where matters relating to transfer pricing issues are involved.

Further comments related directly to the IDS questions:

question 13 was identified as a new derivative question and there was discussion on how the information should be provided to the ATO.

business restructures had four questions with the word 'changes' used, again requiring definitional issues to be resolved.

some questions were unclear and it was uncertain as to who would be responsible for answering them.

Anne Connon informed the NTLG TP that changes to companies' 'natural accounting systems' should not be necessary to complete the IDS. Any members with further reservations in relation to the proposed IDS should contact Naomi Digance of the ATO. It is expected that the IDS will form the basis of the new 2011 Schedule 25As for non FS taxpayers in both LBI and SME

Action item	3/05082009
Description	AC to follow up on this matter and report back to the NTLG TP.
Responsibility	Anne Connon
Due date	Next meeting

Sections within Agenda items

• 1 - 3. Intra-Group Loans and Guarantee fee Discussion
• 4. APA Program review update
• 5. Customs Practice Statement
• 6. ATO Transfer Pricing Compliance Program
• 7. International Dealings Schedule (IDS)
• 8. OECD Update
• 9. Other Business