Australian Transfer-Pricing in the Aftermath of Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (2019)

Abstract

Glencore Investment Pty Ltd v Commissioner of Taxation of the Commonwealth of Australia (2019) 272 FCR 30 has dominated the Australian transfer pricing landscape for the past two years, with international tax specialists awaiting the outcome with great anticipation. The decision in the Federal Court of Australia and its subsequent appeal to the Full Federal Court and the High Court are of great importance to Australian transfer pricing due to its direct implications on the Australian Commissioner of Taxation’s powers of reconstruction. While dealing with older statutory legislation, the insights of the court and the methods utilised to come to a decision have the potential to provide a strong interpretative precedent in future transfer pricing disputes. It is the opinion of the author that the outcome in Glencore will affect the current transfer pricing regime despite the gradual strengthening of the Commissioner of Taxation’s powers under the new legislation. This article revisits the decision in Glencore and aims to provide a frame of reference for the use of members of the tax community and other individuals interested in understanding the context of the appeal and the implications this will have for Australian transfer pricing.