New Zealand companies with trans-Tasman operations may benefit from recent Australian Tax Office (ATO) guidance simplifying Australian transfer pricing transfer pricing recordkeeping requirements. The aim of the new rules is to reduce compliance costs for smaller businesses and to allow the ATO to allocate its audit resources to higher risk transactions and businesses.
For qualifying Australian taxpayers (i.e., small businesses and distributors) and transactions (i.e., low value intra-group services and related-party loans), there will be a reduced need to prepare detailed documentation and a lower risk of audit.
The rules also reflect the ATO’s new tougher transfer pricing approach for those not eligible for simplified recordkeeping.
The simpler requirements may provide relief for New Zealand businesses looking to expand into Australia or those with “small” Australian distribution functions. The simplification measures, however, do not waive the requirement to comply with the Australian transfer pricing rules.
Read a February 2015 report [PDF 144 KB] prepared by the KPMG member firm in New Zealand: Simpler Australian transfer pricing requirements