Transfer pricing implications of related-party loans | KPMG | GLOBAL
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Australia: Transfer pricing implications of related-party loans; appellate court decision

Transfer pricing implications of related-party loans

The Full Federal Court today issued a decision for the Commissioner of Taxation in a case concerning transfer prices used with respect to certain cross-border related-party loans. The decision has implications not only for taxpayers with cross-border related-party financial dealings, but also for taxpayers with other “broader” cross-border related-party dealings.


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The case is: Chevron Australia Holdings Pty Ltd (CAHPL) v. Commissioner of Taxation [2017] FCAFC 62 (21 April 2017).

The case concerns the transfer pricing implications of an intercompany loan agreement between the taxpayer and its U.S. subsidiary (CFC) and whether the interest paid by the taxpayer to the CFC exceeded an arm’s length price for the borrowing. A lower court decision (2015) found that the taxpayer had not “discharged the onus of proof” that the amended assessments raised by the Commissioner were excessive. An appeal was made to the Full Federal Court, which issued its decision today.

What’s next? It is not yet known if the taxpayer will file a Special Leave Application with the High Court of Australia. 


Read an April 2017 report [PDF 91 KB] prepared by the KPMG member firm in Australia

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