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 775-55(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?
Registered
11 February 2015
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
Walter Gianotti, Tax Counsel Network
Phone: (08) 9268 5459
Walter.Gianotti@ato.gov.au
[3901] Related party financing – interest- free loans
Title
Draft Schedule 3 to Practical Compliance Guideline PCG 2017/4
Interest-free loans between related parties
Registered
June 2016
Purpose
The draft Schedule will set out factors for determining whether an interest-free loan between related parties could be either debt or equity in identifying the arm’s length conditions.
Expected completion
To be advised
Contact
International@ato.gov.au
[3908] Thin capitalisation – bifurcation of financial instruments
Title
Final Taxation Determination
Income tax: thin capitalisation – valuation of debt capital for the purposes of Division 820
Registered
August 2016
Purpose
The final Determination will set out the ATO view relating to the valuation of a taxpayer’s debt capital in accordance with accounting standards when applying the thin capitalisation rules contained within Division 820 of the Income Tax Assessment Act 1997.
Expected completion
To be advised
Comments
Draft TD 2018/D4 published on 1 August 2018.
Contact
International@ato.gov.au
[3910] Thin capitalisation – arm’s length debt test
Title
Final Taxation Ruling
Income tax: thin capitalisation – the arm’s length debt test
Registered
July 2016
Purpose
The final Ruling will set out the ATO view on the application of the arm’s length debt test for the thin capitalisation regime.
Expected completion
February 2020
Comments
Draft Taxation Ruling TR 2019/D2 published on 5 April 2019. Comments period closed on 2 August 2019.
Title
Final Practical Compliance Guideline
ATO compliance approach to the arm's length debt test
Registered
October 2018
Purpose
The final Guideline will set out the ATO's compliance approach to taxpayers' use of the arm's length debt test for the purposes of the thin capitalisation regime in Division 820 of the Income Tax Assessment Act 1997.
Expected completion
February 2020
Comments
Draft PCG 2019/D3 published on 28 August 2019. Comments closed on 9 October 2019.
Contact
Nick Trotman, Public Groups and International
Phone: (03) 9285 1568
Nick.Trotman@ato.gov.au
[3926] Transfer pricing – cross-border leasing
Title
Final Practical Compliance Guideline
ATO compliance approach to transfer pricing issues related to projects involving the use in Australian waters of non-resident owned mobile offshore drilling units
Registered
June 2018
Purpose
The Guideline will provide practical guidance on the application of the transfer pricing provisions to cross-border leasing of vessels into Australia, by setting out the ATO's compliance approach to transfer pricing issues relating to the use of mobile offshore drilling units, such as drill-ships, drilling rigs (including but not limited to submersibles, semi-submersibles and jack-up rigs), pipe-laying vessels and heavy-lift vessels.
Expected completion
December 2019
Comments
Draft PCG 2019/D5 published on 26 September 2019. Comments period closed on 25 October 2019.
Contact
Reuben Pace, Public Groups and International
Phone: (03) 8632 5985
Reuben.Pace@ato.gov.au
[3932] Taxing US and UK resident financial institutions under US and UK taxation conventions
Title
Final 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
Registered
July 2018
Purpose
The final 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
April 2020
Comments
The draft consolidation for TR 2005/5 published on 28 November 2018. Comments period closed on 11 January 2019. We are further considering comments and issues raised both during consultation and from subsequent casework.
Contact
James Campbell, Public Groups and International
Phone: (02) 9374 8955
James.Campbell@ato.gov.au
[3944] Prevention of treaty abuse
Title
Draft Law Administration Practice Statement
Administering general anti-abuse rules, such as a principal or main purposes test, included in any of Australia's tax treaties
Registered
October 2018
Purpose
The draft Practice Statement will provide proposed guidance to assist our staff in applying a principal or main purposes test to deny a treaty benefit or to rule on the application of a principal purposes test in a private ruling, class ruling or product ruling. The draft Practice Statement will also outline the proposed role and operation of the General Anti-Avoidance Rules Panel in relation to a principal or main purposes test.
Expected completion
December 2019
Comments
The related practical compliance guideline which was previously expected to be developed on this issue is now considered to be no longer required.
Contact
TaxTreaties@ato.gov.au
[3946] Offshore shipping service hubs
Title
Final Schedule 3 to Practical Compliance Guideline PCG 2017/1
Offshore shipping service hubs
Registered
October 2018
Purpose
The final Schedule will set out practical administration approaches to assist taxpayers to comply with their transfer pricing obligations, and allows taxpayers to self-assess their transfer pricing risk for certain types of offshore shipping service hub arrangements.
Expected completion
To be advised
Comments
Draft Schedule 3 to PCG 2017/1 published on 8 November 2018. Comments period closed on 21 December 2018.
Contact
offshorehubs@ato.gov.au
[3950] OECD hybrid mismatch rules
Title
Final Law Companion Ruling
OECD hybrid mismatch rules – targeted integrity rule
Registered
October 2018
Purpose
The final Ruling will provide the Commissioner's view in relation to the hybrid mismatch targeted integrity rule in Subdivision 832-J of the Income Tax Assessment Act 1997.
Expected completion
January 2020
Comments
Draft LCR 2019/D1 published on 5 April 2019. Comments period closed on 10 May 2019.
Contact
HybridMismatches@ato.gov.au
Title
OECD hybrid mismatch rules – foreign law interactions
Final Taxation Determination
Income tax: is section 951A of the US Internal Revenue Code a provision of a law of a foreign country that corresponds to section 456 or 457 of the Income Tax Assessment Act 1936 for the purpose of subsection 832-130(5) of the Income Tax Assessment Act 1997?
Registered
October 2018
Expected completion
To be advised
Comments
Draft TD 2019/D12 published on 21 November 2019. Comments close on 17 January 2020. We are also considering other options and formats for other areas of foreign law interactions with Division 832 where clarification may be required.
Contact
HybridMismatches@ato.gov.au
[3981] Non-concessional MIT income
Title
Final Law Companion Ruling
Registered
June 2019
Purpose
The final Ruling will address Schedules 1 and 5 to the Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019. In particular, the final Ruling will cover the key aspects of non-concessional MIT income, with particular focus on MIT cross staple arrangement income.
Expected completion
March 2020
Comments
Draft LCR 2019/D2 published 1 July 2019. This draft Ruling has since been updated following the receipt of feedback. We are continuing to consider submissions made on other points.
Contact
Jason.Heng, Tax Counsel Network
Phone: (02) 9374 8423
Jason.Heng@ato.gov.au
[3985] Sovereign immunity
Title
Draft Law Companion Ruling
The superannuation fund for foreign residents withholding tax exemption and sovereign immunity
Registered
September 2019
Purpose
The draft Ruling will address Schedules 3 and 4 to the Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Act 2019. In particular, the draft Ruling will cover the key aspects of the restriction to the superannuation fund for foreign residents withholding tax exemption and the codification and limitation of sovereign immunity.
Expected completion
December 2019
Contact
Kim Browning, Public Groups and International
Phone: (02) 4923 1832
Kim.Browning@ato.gov.au
David Stevenson, Public Groups and International
Phone: (02) 4923 1841
David.Stevenson@ato.gov.au
We are developing advice and guidance on the following international issues.