Jeremy Capes and Kelly Chong discuss the ATO's risk reviews or audits of Life Sciences and medical devices companies.
Healthcare organisations are increasingly recognising the need to move beyond a ‘one size fits all’ approach to their customers, towards tailored heathcare that meets the unique needs of each individual.
Similarly, the Australian Taxation Office (ATO) considers taxpayers to be as uniquely individual as their customers, as discussed when KPMG's Life Sciences team recently met with the ATO's Life Sciences Cluster.
The ATO is currently examining 21 pharmaceutical companies through Advance Pricing Arrangements (APA) , risk reviews or audits and will also focus on 200+ Life Sciences and medical devices companies. The ATO is considering a full spectrum of tax risk across the industry, including transfer pricing, research and development (R&D), withholding tax, tax risk management and governance and, in certain instances, anti-avoidance.
Some specific observations made by the ATO include:
The ATO observations signal that pharmaceutical and Life Sciences will continue to be a priority focus for the foreseeable future.
Remember, there is no ‘one size fits all’ approach to healthcare or tax. Don’t wait for ATO contact or general guidance. Regardless of whether or not you are a large taxpayer, now is the time to revisit and reassess your tax governance, risk and transfer pricing policies.