The Australian Taxation Office has issued new guidance for multinational groups using offshore marketing- and procurment hubs for tax avoidance purposes.
The guidance adresses tax schemes where MNEs uses offshore hubs to shift profits and thereby avoid Australian taxes.
Offshore hub arrangements are catagorised by the ATO as white, green, blue, yellow, amber, or red – based on the risk assesment for tax purposes of the transfer pricing setup.
The new guidance is a result of recent Australian investigations and hearings into tax avoidance schemes used by Multinational Groups.
The overall framework for Australian risk assessment for tax purposes of MNE’s offshore marketing- and procurement hubs is shown below: