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Australia: Guidance on treatment of cross-border payments as royalties for withholding tax purposes; MoU with France on treaty arbitration process under MLI

Taxation ruling TR 2026/2 and draft practical compliance guideline PCG 2026/D4

September 8, 2026

The Australian Taxation Office (ATO) in September 2026 published the following guidance on the treatment of certain cross-border payments as royalties for withholding tax purposes:

  • Taxation ruling TR 2026/2, clarifying when cross-border payments under a software intermediation arrangement for the use of copyright constitute royalties subject to withholding tax
  • Draft practical compliance guideline PCG 2026/D4, outlining the ATO’s compliance approach to determining whether cross-border payments to nonresidents are royalties subject to withholding tax

In addition, the ATO in September 2026 published a memorandum of understanding (MoU) between Australia and France regarding implementation of the treaty arbitration process under Part VI of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”).

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