Reference no: EM13343519

ISSUE FOR RESEARCH: 

Transfer pricing more than ever before is a major issue for companies all over the world. The need to effectively plan the movement of profits between arms of a multinational corporation has become even more critical as companies face an increasing attention from tax authorities on transfer pricing matters. As both developing and developed nations introduce more sophisticated transfer pricing rules, particularly concerning documentation, taxpayers must be fully aware of the intricacies of each set of laws. 

Required: 

(i) Discuss, using appropriate examples, the concept of ‘transfer pricing’ and explain why tax authorities around the world have become concerned about it.

(ii) Discuss recent developments in the ‘transfer pricing’ environment as a consequence of how tax authorities have responded to the transfer pricing issue. Refer to the developments and changes applicable in Australia and as to how the OECD has approached this issue. 

Marks: 

This Research Assignment represents 20% (or 20 marks) of the total assessment. 

- 15% (15 marks) relates to your submission (due Mon 6th October 2014) 

- 5% (5 marks) relates to your class presentation (week beg 6th Oct 2014) 

Due Date: Written submission due on Monday 6th October 2014 (5pm) 

- Group Presentations in Class week beginning 6th October 2014 

Word Length: 2,000 words (excluding footnotes, references and appendices). 

Note: 

- The assignment can be submitted individually or as a group. A group may consist of up to 4 students. 

- This is a research assignment and as such your report should provide your personal/group view based on research evidence, theory and original thought. 

- A class presentation of your report is due in week beginning 6th Oct 2014 

- The assignment must have correctly referenced appendixes. 

- You can refer to the information contained in your additional readings below. 

- You will need to access the CCH library information link which is on blackboard. 

- A good starting point for this assignment would be Chapter 49 of your text book and the website of the ATO (available at: https://www.ato.gov.au/). 

- Other references which will be of assistance are as follows: 

References: 

Texts: 

Barkoczy, S.; Foundations of Taxation Law; CCH Australia, Chapter 49 

Woellner et al; Australian Taxation Law; CCH Australia, Chapter 24 

Australian Master Tax Guide; CCH Australia, Chapter 22 

Other: 

Treasury discussion paper Nov 2011 

https://archive.treasury.gov.au/documents/2219/PDF/Review_of_transfer_pricing_rules_CP.pdf 

Treasury submissions, exposure draft & draft explanatory memorandum 

https://www.treasury.gov.au/ConsultationsandReviews/Consultations/2012/Modernisation-of-transfer-pricing-rules 

Tax Laws Amendment (Cross-Border Transfer Pricing) Bill (No. 1) 2012 

https://www.comlaw.gov.au/Details/C2012B00088 

Explanatory memorandum 

https://www.comlaw.gov.au/Details/C2012B00088/Explanatory%20Memorandum/Text 

Browse the Articles of the OECD Model Tax Convention on Income and Capital at https://www.oecd.org/tax/treaties/oecdmtcavailableproducts.htm 

Priority of Australia’s International Tax Agreements 

OECD Model Tax Convention articles on associated profits (article 9) and the mutual agreements procedure (article 25). 

Arm's length methods 

1. TR 98/11 four step process to implementing 

2. TR 97/20 five methodologies 

3. PS LA 2011/1 advance pricing agreements 

STRUCTURE OF REPORT (15%) 

Presentation is an important feature of any Research report. The following guide to presentation gives a general outline to report writing. 

Title Page 

Table of Contents 

Executive Summary (should not exceed 300 words) 

Introduction and Purpose 

- State aims of the research report 

- Outline contents of research report 

- Sources of data Body of the Report 

- Analysis and discussion of issues 

- Interpretation and discussion of data Conclusion 

- Summary of your analysis and interpretation; findings and results of your work Appendices 

- Include raw data, charts and tables that are not essential to be included in the body of your report 

- Calculations used or referred to Bibliography 

- References used 

PRESENTATION OF REPORT (5%) 

- Groups must present the main findings from their research including a critical analysis of the issues involved. Group to decide which member(s) of group present. 

- Presentation is limited to 15 minutes per group. 

- Presentation will be via use of ppt slides. 

GROUP WORK GUIDELINES 

The assignment can be submitted individually or as a group. A group may consist of up to 4 students. A group project is the collective responsibility of the entire group, and if one member is temporarily unable to contribute, the group should be able to reallocate responsibilities to keep to schedule. In the event of longer-term illness, other serious problems involving a member of a project group or where equal contributions are not forthcoming and this cannot be resolved by the students themselves, it is the responsibility of the other members to make the project supervisor aware of the situation straight away. 

The assignment must be submitted with a duly filled assignment cover sheet. All group members must be satisfied that the work has been correctly submitted. Any penalties for late submission will apply to all group members, not just the person who submitted. The penalty shall be at the rate of 2 marks per day late (including due day of report – if after 5pm). 

REFERENCING 

To avoid plagiarism, you are required to provide a reference whenever you include information from other sources in your work. Further details regarding plagiarism are available in Section C of the unit outline. 

Referencing convention required for this unit is the Swinburne Harvard System. Helpful information on referencing using the Swinburne Harvard System can be found at: https://www.swinburne.edu.au/lib/studyhelp/harvard_style.html