Advice under development – international issues
We are developing advice and guidance on the following international issues.
[3708] Forex realisation event 4
Title
Draft Taxation Determination
Income tax: does forex realisation event 4 happen to the debtor under subsection 775-5(1) of the Income Tax Assessment Act 1997 on repayment of a loan taken out prior to the effective date of a choice to use the applicable functional currency and denominated in the same non-Australian dollar currency that later becomes the applicable functional currency?
Purpose
The draft Determination will set out proposed clarification on whether forex realisation event 4 happens on repayment of a loan obligation incurred prior to the effective date of an applicable functional currency choice and denominated in the same non-Australian dollar currency that later becomes the applicable functional currency.
Expected completion
To be advised
Contact
Erin Gordon, Office of the Chief Tax Counsel
Phone: (08) 9268 5353
Erin.Gordon@ato.gov.au
[3932] Taxing US and UK resident financial institutions under US and UK taxation conventions
Title
Addendum to Taxation Ruling TR 2005/5 Income tax: ascertaining the right to tax United States (US) and United Kingdom (UK) resident financial institutions under the US and the UK Taxation Conventions in respect of interest income arising in Australia.
Purpose
The Addendum will clarify certain aspects of the second limb of the definition of 'financial institution', which is used in Australia's double-tax conventions with the US and the UK.
Expected completion
May 2023
Comments
A draft update to TR 2005/5 published on 28 November 2018. Following further consideration, a subsequent draft update TR 2005/5DC2 published on 28 September 2022. Comments period closed on 11 November 2022.
Contact
James Campbell, Public Groups and International
Phone: (02) 9374 8867
James.Campbell@ato.gov.au
[3950] OECD hybrid mismatch rules
Title
Hybrid mismatch rules – subject to foreign income tax
Purpose
This guidance will address the Commissioner’s view on key aspects of the ‘subject to foreign income tax’ definition, with particular focus on treatment of intra-group payments between members of the same US consolidated group.
Expected completion date
Late 2023
Comments
Expected completion of this product is delayed due to higher priority work over the coming months.
Contact
Hybridmismatches@ato.gov.au
[4006] Intangibles arrangements
Title
Draft Practical Compliance Guideline
Intangibles arrangements
Purpose
The draft Guideline will set out the ATO's proposed compliance approach to international arrangements connected with the development, enhancement, maintenance, protection and exploitation of intangible assets; specifically, the potential application of the transfer pricing, general anti-avoidance rule (GAAR) and the diverted profits tax (DPT) provisions. The capital gains tax and capital allowances provisions will also be discussed in this Guideline where these may be considered alongside, or relevant to, the ATO’s transfer pricing, GAAR or DPT risk assessment.
Expected completion
May 2023
Comments
We are making further changes to the original draft PCG 2021/D4 based on feedback received through the consultation process and internal review. In light of the changes, we will be publishing a revised draft Guideline for further consultation and comment before finalising the Guideline in the coming months.
Contact
IntangiblesArrangements@ato.gov.au
For more information, see Consultation matter [202017].
We are developing advice and guidance on the following international issues.