The NT Budget 2013-14 was handed down Tue 14.5.2013. The NT Treasurer David Tollner announced 2 proposals focusing on protecting the integrity of the Territory’s mineral royalty regime. The first proposal is to establish the rules governing the amount that a royalty payer can claim as a transfer pricing margin. Mr Tollner said accounting for transfer pricing is administratively burdensome on both the Territory and the miner. He said the new rules would clarify the arrangements and minimise the need for costly valuations from both parties. The claimable transfer pricing margin will be capped at 5.5% except in circumstances where the royalty payer has a relevant transfer pricing arrangement in place with the Tax Office.
The second proposal is to limit the deductibility of head office expenses, management fees and administrative labour costs to those costs incurred by an office located, or for work performed, in the Territory. According to the NT Government, the proposal will address the risk of accounting strategies that shift expenses to the Territory that were incurred by related entities based elsewhere in Australia or internationally.
The Territory Revenue Office (TRO) has issued Revenue Circular RC-GEN-014 which contains further information of the Budget proposals.
[LTN 90, 14/5/13]