FORD and other car-makers are seeking a clearer deal on federal tax and customs charges to avoid a double-tax slug under new laws on overseas purchases.
Changes to transfer pricing rules for both income tax and custom duty would directly impact on the Geelong manufacturer, Federal Chamber of Automotive Industries has warned.
Chamber boss Tony Weber, acting on behalf of Australian car-makers and major importers of cars and motorbikes, highlighted inconsistencies between tax and customs laws to Federal Government.
But a bill to bring the taxes in line would affect not just the auto industry, a significant importer of goods and services, but also numerous other manufacturers across the country.
The Exposure Draft Tax Laws (Cross-Border Transfer pricing) Bill 2013 relates to transfer pricing benefits available to companies when involved in overseas purchases. But when calculating the benefit companies’ taxable income and overall profitability is gauged rather than the pricing of overseas transactions.
Aimed at tightening laws under which companies can lower their tax liabilities, car-makers fear the new laws would increase their charges.
“We request a whole of government approach to transfer pricing, not only from an income tax perspective, but also in relation to customs duty,” Mr Weber wrote to Treasury.
“The government has previously committed to a whole of government approach to legislation and this approach needs to be reflected in the modernisation of the transfer pricing rules.”
A Ford spokesman said the chamber was handling the issue on Ford’s behalf and declined to comment further.
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