Inter-bank Offered Rate reform - Australian tax considerations

Taxpayers will need to consider whether IBOR reform related changes to their financial arrangements have tax consequences, including transfer pricing benefits, as discussed by Julian Humphrey, Alia Lum and Nathan Caprara.

The transition from the Inter-bank Offered Rate (IBOR) to Alternative Reference Rates (ARRs) is nearly complete. From a tax perspective, the key consideration is whether changes to existing financial arrangements to incorporate ARRs results in a tax event or change in the tax status of the financial arrangement.  For many financial arrangements with existing ‘fall back’ provisions and for taxpayers who have made the TOFA reliance on financial reports election, the tax consequences are ...

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Authors: Julian Humphrey, Alia Lum,

Published Date: 11 April 2022