The Assistant Treasurer on Thur 24.5.2012, announced that he had commissioned the Board of Taxation to investigate the impacts of Australia adopting the Authorised OECD Approach in respect of the attribution of profits to permanent establishments.
He said the OECD endorsed the “functionally separate entity approach” in 2010, which differs from the method for attribution of profits to PEs currently used in Australia, however this approach has had uneven take-up internationally.
As part of the review, the Board will also look at the cap that currently exists on the interest rates on certain international interbank loans, which is currently set by the London Interbank Offered Rate (LIBOR), including those between an Australian bank and its foreign head office.
The Board is due to report to the Assistant Treasurer by 30 April 2013.
Source: Assistant Treasurer’s press release No 036, 24 May 2012
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