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Australia Tax Guide 2013 And And Kpmg [Unlimited EBooks]
Click anywhere on the bar, to resend verification email. We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. You will not continue to receive KPMG subscriptions until you accept the changes.Please take a moment to review these changes. You will not receive KPMG subscription messages until you agree to the new policy.Organizations of all sizes are ever more exposed to new trends in tax regulation, not just locally but globally.Organizations of all sizes are ever more exposed.All rights reserved. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-a-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. Not only has Australia sought to address TP through more definitive laws and their alignment with Australia's tax treaties and the OECD's TP Guidelines, new record keeping or documentation requirements with respect to TP have also been introduced and more closely aligned with the existing legislation framework. New laws New TP laws were introduced in 2013 in response to the ATO's loss in 2011 in the Full Federal Court case of Commissioner of Taxation vs SNF (Australia) Pty Ltd. In this case, the court found the existence of ongoing losses in an Australian subsidiary does not necessarily mean that the price paid to international related parties is not an arm's-length price. This case highlighted the difficulty faced by the ATO, under the then existing TP provisions, in applying a profit-based methodology in a situation where the taxpayer was in a period of continued loss.
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The new legislation differentiates itself from its predecessor given its focus on profit as a key consideration in determining whether transactions between international parties have been undertaken on an arm's-length basis. The aim of the new laws is to modernise Australia's TP rules and to ensure consistency in their application between both tax treaty and non-tax treaty cases. As with Australia's previous TP rules, the new provisions are sufficiently broad to capture non-arm's-length dealings between both related and unrelated parties. One of the more positive outcomes of the new law has been a change of the period for amendment. The new legislation limits the period for amendment to seven years, and while this is still longer than that of the general tax provisions of four years, it is undoubtedly better than the previous situation where there was no limitation on the period to amend. In addition the new TP legislation is aligned with the more general policy intent of self-assessment. Consequently the new rules are self-executing. This, however, places a higher degree of emphasis on taxpayers, and particularly public officers, who must form a view at the time of lodgement of the income tax return that dealings have been structured and priced on an arm's-length basis for tax purposes, for which they may be held accountable. A key aspect of the new legislation is that it does give the ATO power to reconstruct dealings (Section 815-130), in exceptional circumstances. Exceptional circumstances include inconsistency in the form and substance of a particular arrangement and situations where the arrangement is not one that would have been entered into by independent parties acting at arm's-length. The reconstruction provisions in section 815-130 are intended to be consistent with those described in paragraph 1.65 of the OECD's TP Guidelines.
As well as specific legislation to include both trusts and partnerships (Subdivision 815-D), the new legislation also has application to entities with permanent establishments (Subdivision 815-C). The application of the permanent establishments rules in Australia provide for the allocation of income and expenses between an entity and its parts to be reflective of that between separate entities dealing wholly independently with each other. The last piece of the new TP legislative package relates to the introduction of new record keeping or documentation standards (Subdivision 284-E of Schedule 1 of the Tax Administration Act 1953). Once again the self-assessment regime will dictate the importance of this process to those managing tax risk and especially public officers who must make declarations in regards to the contents of annual returns provided to the ATO. The IDS requires disclosure of international related party transactions, TP methodologies, together with an indication as to the level of documentation held for any international related party dealings. The IDS is used as a risk assessment tool by the ATO to better target compliance activities and focus resources on high risk areas in its international tax programme. Unlike the previous legislation which went relatively untested for 30 years, there is an expectation that the ATO will seek to test the new TP rules fairly early as it is the cornerstone to the Australian government's strategy on base erosion and profit shifting (BEPS). The new law will also be supplemented by the ATO issuing a number of new and revised TP rulings and practice statements. A number of these are due for release in draft form in the second quarter of this year. BEPS strategy Prime Minister Tony Abbott has indicated his intention to have Australia at the forefront of G20 initiatives.
The Australian government has been overt in its statements regarding its intention to use the G20 presidential term to demonstrate strong leadership in this area. Unsurprisingly, the ATO is tasked with providing major intelligence and deliverables to support these statements. Specifically a new taskforce has been set up with its focus being: To work with international partners to establish the purpose of Australian businesses in low-tax jurisdictions. Address BEPS through compliance activities, including bilateral and multilateral audits, supported by newly implemented laws. To understand digitalisation of the Australian economy and the implications for the tax system. To support Australian and OECD policy development. In addition to annual compliance activities, including TP and its advance pricing arrangement (APA) programme, the ATO has recently launched another compliance project, ISAPS (international structuring and profit shifting), related to its BEPS strategy. Thes ISAPS project consists of around 120 risk reviews commenced in the last quarter of 2013 and continuing throughout 2014 forming the basis for an audit programme likely beginning in late 2014. The areas covered by this project are broader than just TP and include permanent establishments, thin capitalisation, controlled foreign companies (CFC), and particularly offshore trading hubs and business restructures. The ATO has indicated that it will not be using formal powers (Sections 264 and 264A) at the beginning of this process, it may however, use formal powers where responses are untimely or incomplete. Apart from those taxpayers selected for this project it is also likely that other international compliance work will contain either these questions or, at least, a subset of them. In any case the ATO is likely to have a strong focus on the supply chain and the location and activities of group entities.
Given the looming dates for amendments to the OECD TP Guidelines in the areas of intangibles and documentation and the Australian government's declared interest in leading issues in TP and BEPS during its presidency of the G20, it is not unreasonable to envisage that Income Tax Regulations would be made soon after any amendments to the OECD TP Guidelines are finalised so that taxpayers and the ATO are required to have regard to such changes for purposes of preparing their income tax returns going forward. Restructure of ATO compliance areas With the appointment of a new commissioner of taxation in January 2013 it is not unexpected to see some changes in the ATO's internal structure. Of particular relevance is the restructure of the Compliance areas of the ATO. The major changes are to remove the small and medium enterprise and large market approach to compliance work. This enlarged group of taxpayers has resulted in a few problems around resourcing, particularly servicing the lower end of the market, and required a reshaping of the risk differentiation framework (RDF) that the ATO uses to classify taxpayers and their compliance risks. Capital (or market) support payments. Market support payments have been the subject of a number of papers over recent years, particularly in the wake of the financial turmoil. These were seen as a reasonable approach in supporting a multinational group's focus in a particular jurisdiction and to remain strategically placed to benefit from the eventual upswing in market conditions. Australian tax law differentiates both income and deductions based on an item's classification as being of a revenue or capital nature. This is important as, simplistically, the general provisions of the law provide for income and deductions of a revenue nature in the calculation of taxable income. Capital profits or losses are brought to account for Australian income tax purposes under specific, event driven, provisions.
Consequently, as TP transactions underpin the numbers of a profit and loss account, such transactions are generally considered to be of a revenue nature and income or deductions for Australian income tax purposes. However, the ATO has identified some of these types of payments to be of a capital nature, taking the view that some are for the purpose of providing financial support and more akin to capital injections to ensure sufficient operational cash flow for continued trading. While specific marketing support strategies may be acceptable when related to products and services, it is important in the Australian context that there is sufficient nexus between the characterisation of the payment and the purpose for which it is being used. Further changes in the landscape in 2014 Notwithstanding the changes to the TP landscape in Australia and internationally in recent years, further changes are likely to occur in 2014. At the international level, late 2014 deliverables under the OECD's BEPS Action Plan are likely to be influential on the Australian government's thinking and the ATO's administration of TP. Domestically, there are also a number of events that are likely to result in further changes to the TP landscape, including: Expected reductions in Australia's thin capitalisation safe harbour limits (for many taxpayers this will mean an effective reduction in the maximum ratio of debt to equity from 3:1 to 1.5:1); The government's response to the Board of Taxation's Review of Tax Arrangements Applying to Permanent Establishments; and Inspector-general of taxation's review into the ATO's management of TP matters. We live in interesting times. With prior commercial experience negotiating arm's-length pricing arrangements, Tony provides a practical interpretation of the complex technical rule book. Tony's abilities to influence and negotiate on behalf of clients are the cornerstone of his reputation.
Tony leads a number of transfer pricing projects across the ASPAC region that involve establishing arm's-length pricing for transfer pricing purposes. He leads a number of clients for KPMG locally and regionally in the technology and media space. Biography Damian Preshaw. Damian advises clients in a wide variety of industries on transfer pricing and profit attribution issues with a special focus on dispute resolution, financial services and business restructuring. Damian represented the Tax Institute in consultation with Treasury on the recent review of Australia's transfer pricing rules. Before joining KPMG, Damian was an international tax counsel in the ATO's transfer pricing practice where he focused exclusively on international transfer pricing and cross-border related party financial dealings. He was extensively involved in the ATO's transfer pricing rulings programme and was an Australian delegate to the OECD's Working Party No. 6 and its steering group on transfer pricing from 1994 to 2003. Biography Sean Wright. He has a deep understanding of ATO products, processes and programs and brings to the table highly developed skills in risk analysis, negotiation and dispute resolution and in the development of transfer pricing strategies across a broad range of industries including pharmaceutical and chemicals, media and technology, telecommunications and retail and consumer products. Sean's experience includes leadership in all forms of active compliance work including audits, risk reviews, APAs and in the resolution of this work through APAs, settlement, mutual agreement procedure or through less formal approaches. His experience in transfer pricing work also includes critical review of transfer pricing documentation and chairing ATO transfer pricing review panels to guide and support transfer pricing work in the ATO. It is for information only. Please read our Terms and Conditions and Privacy Policy before using the site. All.
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He created a page for these songs, and included deep links to the MP3 files on the source servers.Retrieved 28 June 2016. Archived from the original on 2 February 2017. Retrieved 28 January 2017. Retrieved 23 August 2017. Retrieved 5 September 2014. Retrieved 5 September 2014. Retrieved 5 September 2014. Archived from the original on 11 October 2014. Retrieved 5 September 2014. CS1 maint: bot: original URL status unknown ( link ) Retrieved 8 September 2014. Retrieved 8 September 2014. Retrieved 8 September 2014. Retrieved 8 September 2014. Retrieved 25 December 2008. Retrieved 18 November 2010. Retrieved 8 September 2014. Archived from the original on 25 July 2014. Retrieved 8 September 2014. Retrieved 8 September 2014. Retrieved 18 April 2017. ISSN 0099-9660. Retrieved 31 March 2019. Retrieved 5 May 2021. Retrieved 20 May 2021. Retrieved 21 January 2019. CS1 maint: multiple names: authors list ( link ) Retrieved 22 March 2010. Retrieved 8 September 2014. Retrieved 8 September 2014. Retrieved 5 September 2014. By using this site, you agree to the Terms of Use and Privacy Policy. It audits individual firms, conducts analysis that is used by the industry to resist tobacco control legislation, and has provided strategy advice to a tobacco company seeking to burnish its corporate reputation. A board-level public commitment from BAT to “deal with the smoking and health issue”, was needed. KPMG was clear, however, that there was no need for the tobacco giant “to adopt a strategy to get out of the tobacco industry”. But engagement has proved difficult because of the level of distrust of BAT and the tobacco industry. However, BAT believes that it can contribute proactively to the debate on regulation through a demonstration of willingness for a responsible level of self-regulation.
” It also proposed extensive funding of research and on making high profile gestures, such as publicly withdrawing from the “slow-moving and historically defensive” industry group, the Tobacco Manufacturers’ Association. For example, conducting studies for third-party tobacco groups, such as the Coalition Against Regressive Taxation that were used by the industry to oppose tobacco taxes and regulations. 13 14 KPMG’s study of the illicit market was to be undertaken on an annual basis. The report warned that, due to a subtle change in methodology the 2012 data could not be accurately compared with the previous year’s data, and that this change would lead to an overestimate in 2012 compared to 2011. 28 They concluded that there was little information provided on the Project Star methodology used to produce the illicit estimates, and that Project Star underestimated legal cross-border sales by using interviews and what are termed Empty Pack Surveys (EPSs). Tourist seasons would see more foreign packs and so this information would provide important context; No description was given of how areas were selected and only large cities were included and therefore non-urban areas were under-represented. For example, those who are more deprived are more likely to use illicit tobacco 29 30 31 and live in urban areas. 32 33 This is against the Illicit Trade Protocol, where tobacco companies are accountable for ensuring their supply chain is adequately controlled. PMI did not publish this data when presenting the findings of the 2010 report. This corroborated data from Her Majesty Revenue and Customs (HMRC) indicating that the illicit tobacco trade has actually been declining over time, although a small increase from 2011-12 to 2012-13 was noted in the estimated figures from 2012-13. The 2012-13 estimated figure for the UK was 9 which is the same as the 2010-11 figure.
34 For a counter argument go here: The report stated that “alternative data sources suggest this 2012 estimate may have overstated non-domestic incidence for the full year”. KPMG claimed that additional data which were not previously available to them “suggest there has been a more gradual decline from 2011 to 2013?. A KPMG report prepared for the tobacco industry (British American Tobacco Australia, Philip Morris Ltd and Imperial Tobacco Australia Ltd) and released on 4 November 2013, claims that during 2012-2013, consumption of illicit tobacco grew from 11.8 per cent to 13.3 per cent of total tobacco consumption in Australia.KPMG appears to have underestimated likely amounts brought into Australia both by Australian residents returning from overseas visits and by overseas students and other visitors. And it has neglected to include foreign packs brought in by individual travellers or mailed in excess of personal limits but on which customs duty has been paid. The total market for illicit tobacco in Australia is likely to be substantially smaller than is suggested in the KPMG report”. 41 I have considered both this report and a critique. My team have also met with KPMG in order to understand their methods.” This can lead to potential conflicts of interest. In September 2017, KPMG announced that it was withdrawing the findings and conclusions of its report on its SARS investigation. 57 The former UK public relations company Bell Pottinger was also implicated for its relationship to the Gupta family, ultimately leading to it being forced into administration. These include: For example, the firm has been involved in recent efforts to restructure the National Health Service (NHS) in England. In 2010, KPMG’s head of health, Mark Britnall, told a conference of private sector executives that future NHS reforms would show “no mercy” to the NHS and offer a “big opportunity” to the for-profit sector.
He also said the NHS will be transformed into a “state insurance provider, not a state deliverer” of care. 63 TobaccoTactics has a policy of Strict Referencing. This work has previously received funding from The New Venture Fund, Smokefree South West, and the Economic and Social Research Council (ESRC) Knowledge Exchange Opportunities scheme. These funders have had no input into the research reported on this website or its conclusions. They are not responsible for its content or publication, nor do they necessarily endorse it. Published by the University of Bath. Read the General Disclaimer. All rights reserved.”.
This is because the American economy is the biggest in the world, so that a small percentage of it is still going to be bigger than a much larger percentage of other economies. America’s role as an exporter has declined in recent years. In 1950, a full third of the world’s exports came from the United States. Today that figure stands at about an eighth. This is not because the American economy has shrunk or become less productive or competitive, but simply because other countries, especially large emerging economies such as China and Japan, have dramatically increased their exports. (Plus, during World War II, most German and Japanese factories, along with English and French factories, were destroyed. Notice that the United States has been surpassed by Germany as the world’s largest exporter, a title held by the American economy for many years. This, too, will probably change before too many years pass. Given the rapid expansion of the Chinese economy and the amounts they export, we can expect them to surpass Germany in the future if current trends continue. 10 Part 1: Is the World Everybody’s Oyster Now. Country Exports (in Billions of Dollars) Germany United States China Japan Netherlands United Kingdom Italy Canada Belgium 969.9 904.4 762.0 594.9 402.4 382.8 367.2 359.4 334.3 Source: World Trade Organization Are They the Luckiest People. Hong Kong, for example, is a wealthy economy that has benefited tremendously over the years from being an efficient and effective exporter. So not only do they rely on foreign customers and sources of revenue, they also depend on outside suppliers for basic necessities, such as food and fuel. In contrast, the United States has sectors of its economy (such as agriculture) where overseas sales are a significant portion of their business.
According to The Economist, the United States imported 36 percent of industrial supplies and 27 percent of consumer goods in 2006, but overall the American economy is more selfsufficient than many other countries. Warning, Pothole Ahead. Chapter 1: It’s a Small World After All 11 The United States imports more than it exports. Economists are divided on what this means. One school of thought is that this is the result of a wealthy economy able to afford buying more than it sells. Another school of thought maintains that we are living beyond our means and heading for trouble if the trend continues. We will examine the debate in more detail in the chapters ahead. Guatemala, for example, would see a drastic fall in their export revenues if Americans stopped buying their coffee beans. This table lists the world’s top 10 importers. Country Imports (in Billions of Dollars) United States Germany China Japan United Kingdom France Italy Netherlands Canada Belgium 1,732.4 934.0 752.0 535.0 604.0 521.0 484.0 343.0 413.0 318.7 Source: World Trade Organization As the World Trades After declining in the 1930s and early 1940s, global trade has increased steadily since the end of World War II. With economies becoming more and more informationbased, we can expect more of the same in the future. As you know from e-mailing and using the Internet, transmitting information can be done in a flash today. Distance, though still an important consideration for tangible goods, does not matter when knowledge is bought and sold. After all, sending a file to somebody on the other side of the world does not take any longer than passing a note to the person in the next cubicle. 12 Part 1: Is the World Everybody’s Oyster Now. Not only was transportation expensive, it also required the sacrifice of a lot of time to get from one place to another, combined with all the risks that went with making the journey. The further the distance, the higher the risk for travelers and traders.
The effect is to “shrink” the globe and increase opportunities to profit from trade. Natural gas is piped into the United States from Canada. Diamonds can be flown anywhere by plane quickly. Huge tankers transport oil across oceans. Grain can be shipped through the great lakes and across the sea to any port. A walk through the produce section of any large grocery store is a great lesson in what is possible when transportation improves. Ginger root from China, peppers from Belize, blueberries from Colombia, pineapples from Ecuador, and artichokes from Mexico are but a few examples from a constantly growing list of what we can count on finding easily. A hundred years ago you would have needed to travel to the countries themselves to get these items, and it would have been a long, slow trip to make just to sample some foreign food. Chapter 1: It’s a Small World After All 13 Can We Talk. If you are in charge of purchasing for a chain of grocery stores, you can fire up your computer, go online, and get price quotes on beef from Brazil, brie from France, tea from China, and beer from Germany in a flash. Placing an order can be done just as quickly, as can paying the bill after the goods arrive. If you need to talk to a supplier abroad, telephone quality has improved, while costs have dropped considerably. Those same phone lines allow you to fax documents back and forth to your heart’s content. From almost anywhere in the world, you can find out about changing stock prices on the New York Stock Exchange, what the exchange rate is if you need to acquire foreign currency, or interest rates in Asia. If you call your American bank, there is a good chance your call will be routed to a call center in India, a location made possible by falling communication costs. Across Africa, India, and Indonesia, cell phones are bringing the magic of instant communication across distances to developing countries. The economic benefits for coordinating trade have been enormous.
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