Expect Australia Tax Scrutiny Despite PepsiCo Ruling, Pros Say

Multinational corporations hoping PepsiCo Inc.‘s court victory over the Australian Taxation Office last year would help them avoid similar audits from the agency should prepare for continued examinations, tax professionals said, as the ATO vows to maintain close scrutiny of cross-border transactions involving intellectual property and royalties.

The agency released a decision impact statement this week saying that ramifications of the High Court’s PepsiCo ruling were largely limited to the unique facts of the case, and that it would continue asserting embedded royalties and diverted profits tax when appropriate.

“The key message is that the ATO will be expected ...