Officials of the Australian Taxation Office (ATO) appeared before a Senate inquiry panel in July 2015, and while the focus of that appearance was on pharmaceutical companies, some comments emerged that are applicable to all Australian taxpayers with cross-border arrangements.
In short, the ATO officials expressed concern in respect of Australian members of multinational groups as follows:
The ATO has indicated that it will apply this lens to Australian taxpayers, a task made easier with the country-by-country reporting measures proposed to take effect in Australia beginning 1 January 2016.
Given this evolving focus, taxpayers may want to consider the robustness of their existing transfer pricing policies and documentation. Taxpayers might also consider active engagement with the ATO and whether an advance pricing agreement (APA) provides an appropriate strategy to engage.
Read an August 2015 report prepared by the KPMG member firm in Australia: Transfer pricing - a renewed focus on arm's length behaviours?