Australia: Guidance on Offshore Hubs
On January 18, 2017, the Australian Taxation Office (ATO) published Practical Compliance Guideline PCG 2017/1. It outlines the ATO’s approach to transfer pricing (TP) issues related to offshore “hubs,” which are defined in the Guideline as “centralized operating models” established to locate and relocate “certain business activities and operating risks.” In particular, the Guideline is targeted at the use of offshore hubs that carry out functions such as procurement, marketing, sales and distribution. The implication is that the use of such hubs is an artificial or contrived means of shifting profits out of Australia and into lower tax jurisdictions. Please refer to the Radius blog article http://www.radiusworldwide.com/blog/2017/2/australia-puts-multinationals-notice-don-t-shift-profits-offshore-hubs for full detail.