The ATO has issued a draft decision impact statement (DIS) in response to the Full Federal Court decision in FCT v Glencore Investment Pty Ltd [2020] FCAFC 187. This follows the High Court’s decision to refuse the Commissioner’s application for special leave to appeal the decision ([2021] HCATrans 98). The Full Federal Court had dismissed the ATO’s appeal (except in relation to freight expenses in 2009) against a decision that the price paid by the Swiss parent company to an Australian subsidiary for copper concentrate was within an arm’s length range for transfer pricing purposes.
In the DIS, the ATO says it does not accept that the Glencore decision narrows the extent by which a comparable hypothesis is to be personalised, nor that it sets a standard for “depersonalisation”. The DIS also sets out the ATO’s view on how the totality of evidence should be examined to best establish the arm’s length consideration or the arm’s length conditions that might reasonably have been expected to operate in any given case.
COMMENTS on the DIS are due by 28 October 2021. [LTN 188, 29/9/21]
[Tax Month – September 2021] 30.9.21