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SingTel’s Transfer Pricing Case Continues

3rd May 2022

Just when you thought the Singapore Telecom transfer pricing case was over, the Australian subsidiary has filed for an appeal. At the end of last month, Singapore Telecom Australia Investments Pty. Ltd. appealed a decision in a $226 million transfer pricing case. Need a refresher on the case? In December, the Federal Court of Australia denied tax deductions to Singapore Telecom Australia Investments on interest payments it made on an intercompany loan of AUD$5.2 billion (almost $4 billion) to an affiliate in the British Virgin Islands. The court ruled that since two independent parties would never have agreed to the arrangement, the deductions between the related parties shouldn’t be allowed. The court claimed the deductions violated Australia’s transfer pricing rules, and as a result of the decision, Singapore Telecom Australia’s Investments’ taxable income increased by AUD$894.7 million for 2010-2013. After the December ruling, the Australian entity went back to the court, claiming it should be allowed to carryforward a loss in the amount of AUD $259.5 million, but again, the court said, no. But maybe the third time’s the charm?