Transfer Pricing Money The Chevron Case

Abstract

The Chevron case decided by the Federal Court of Australia in late 2015 demonstrates the ongoing failure of international tax law and transfer pricing to deal with the basic issue of pricing money. Information for the apparently simple exercise of pricing an intra-group loan sufficient to satisfy a judge cannot be obtained and the OECD and ATO refuse to provide meaningful practical assistance. Moreover, although the OECD has a chance in 2016-2017 to improve matters as it considers the interaction of the final BEPS reports on Action 4 and Action 9, it seems unlikely that much will happen based on the record to date. Developing countries in particular for which the OECD now expresses much sympathy in dealing with international tax issues have reason to be unhappy with the international efforts.