Taxing Software Payments: Embedded Royalties and the Australian Taxation Office’s Non-Uniform Approach

This article examines the characterization of cross-border software payments as royalties under OECD and UN treaty commentary, recent regional decisions and the ATO’s TR 2024/D1. It argues that TR 2024/D1 diverges from international norms, creating uncertainty, and increasing the risk and duration of treaty-based disputes.