On 3 September 2019, the Federal Court (Davies J) handed down its decision in Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia [2019] FCA 1432 (Glencore case) in favour of the taxpayer. This judgment is important because it provides clarity in relation to Australia’s transfer pricing rules and, in particular, aspects of the Full Federal Court’s 2017 decision in the Chevron
case.
Subject to the outcome of any appeal, this latest transfer pricing decision is expected to have a significant impact on a broad range of outstanding transfer pricing disputes.
Taxpayers who are setting, reviewing or defending their Australian transfer pricing arrangements at the risk review or audit stage will need to carefully assess their circumstances in light of the Glencore decision and consider the precedential impact of this seminal decision.
