Australia Federal Court Releases Decision on Cross-Border Transfer Pricing Involving Interest Deductions

The Australian Federal Court March 8 released a decision in Case No. FCAFC 29/2024, on cross-border transfer pricing for interest deductions under a related-party financing arrangement. The taxpayer, an Australian-resident company, acquired shares from a Singapore-resident affiliate company and entered into a loan note issuance agreement (LNIA). The taxpayer claimed transfer pricing benefits for deductions based on interest paid on loans in its acquisition of a company. The commissioner disallowed interest deductions claimed by the Australian company and contested tax assessments for specific years. On appeal, the Federal Court agreed with the commissioner and found that: 1) the taxpayer failed ...