Pitcher Partners Advisors Proprietary Limited ABN 80 052 920 206
Ref: AOC:lg
Level 13, 664 Collins Street Docklands VIC 3008 Level 1, 80 Monash Drive Dandenong South VIC 3175
28 April 2023
Postal Address GPO Box 5193 Melbourne VIC 3001 p. +61 3 8610 5000
Ronita Ram A/g Assistant Secretary Tax Treaties Branch Corporate and International Tax Division The Treasury Langton Crescent PARKES ACT 2600 By Email: MNETaxIntegrity@treasury.gov.au Dear Ms Ram MULTINATIONAL TAX INTEGRITY – DENYING DEDUCTIONS FOR PAYMENTS RELATING TO INTANGIBLE ASSETS CONNECTED WITH LOW CORPORATE TAX JURISDICTIONS 1.
Thank you for the opportunity to provide comments to Treasury in relation to the exposure draft legislation (“ED”) and explanatory memorandum (“EM”) relating to the proposed measure to deny significant global entities (“SGEs”) deductions for certain payments relating to intangible assets.
2.
Pitcher Partners specialises in advising taxpayers in what is commonly referred to as the middle market. Accordingly, we service clients that may be disproportionately affected by the cost of compliance with measures that ostensibly target multinational tax avoidance practices.
3.
We understand Treasury’s intends for the proposed measure to be consistent with attracting investment and genuine commercial activities in Australia without imposing excessive compliance costs for business. In this regard, we highlight that businesses incur significant costs and risks to produce intangible assets and should be entitled to a fair reward on such an investment. Adopting an overly broad role to deny deductions for all payments related to the exploitation intangible assets connected with low corporate tax jurisdictions is likely to disincentivise foreign investments and developments being entered into and/or rolled out into Australia. As a result. Australia may miss out, or be delayed access to, the benefits of ground-breaking developments if Australia is viewed as a commercially problematic or overly burdensome jurisdiction in which to operate.
4.
Australia has existing laws and guidance in place to address the tax implications of shifting assets, risks and functions in respect of intangibles. These are significantly
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Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. B J BRITTEN D A THOMSON M C HAY S SCHONBERG S DAHN P A JOSE
A R YEO M J HARRISON P W TONER T SAKELL G I NORISKIN A T DAVIDSON
K L BYRNE C D WHATMAN S D WHITCHURCH A E CLERICI D J HONEY G J NIELSEN
A D STANLEY N R BULL D C BYRNE A M KOKKINOS P B BRAINE G A DEBONO
R I MCKIE F V RUSSO M R SONEGO A T CLUGSTON S J DALL M G JOZWIK
D W LOVE B POWERS A SULEYMAN K J DAVIDSON D R DOHERTY
J L BEAUMONT M DAWES B A LETHBORG M J WILSON I CULL
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