Australia: Tax authority relies on anti-avoidance, not transfer pricing, in foreign related-party financing dispute

Federal Court decision

Federal Court decision

The Federal Court on 21 June 2023 issued a decision on a procedural matter in a case relating to the tax authority’s denial of interest deductions with respect to foreign related-party financing which reveals that the tax authority has abandoned its reliance on transfer pricing arguments and apparently is relying solely on general anti-avoidance provisions (i.e., Part IVA of the Income Tax Assessment Act 1936).

The case is: Mylan Australia Holding Pty Ltd v. Commissioner of Taxation [2023] FCA 672

KPMG observation

The case was shaping up to be the first test of Australia’s “new” (almost 10 years old) transfer pricing regime in Subdivision 815B, but the tax authority has apparently abandoned that line of argument. This is noteworthy because the tax authority has generally relied on Australia’s transfer pricing rules in other recent litigation and opted not to pursue anti-avoidance arguments in those cases.

For more information, contact a KPMG tax professional in Australia:

Kristie Schubert |

Tim Keeling |

Sam van Berkel |




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