Australian Taxation Office (ATO) proposes 5% royalty withholding tax on digital software transactions for US tech giants, potentially causing a treaty dispute.
The Australian Taxation Office (ATO) is in conflict with US tech giants over plans to tax digital software transactions for the first time, potentially sparking a treaty dispute between the two nations. The ATO's new ruling on software payments focuses on the intellectual property aspect of consumer payments. This move could result in a 5% royalty withholding tax (RWT) for US firms receiving payments from their distributors if deemed to be IP-related, not payment for services.
April 07, 2024
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