Australia – Transfer pricing recordkeeping, final guidance

December 17: The Australian Taxation Office (ATO) today finalised the transfer pricing ruling TR 2014/8, outlining the Commissioner’s views on the application of the recordkeeping provisions in Subdivision 284-E of Schedule 1 to the Taxation Administration Act 1953 (Subdivision 284-E).

Taxpayers need to adequately address the requirements of Subdivision 284-E to be eligible for a “reasonably arguable position” (RAP).

The ATO also finalised its practice statement on transfer pricing penalties PS LA 2014/2 and released PS LA 2014/3 in respect of “simplified transfer pricing recordkeeping” options.

Overall, the ATO’s new ruling:

Incentivises taxpayers (through reduced penalties in the event of a transfer pricing adjustment) to enhance their transfer pricing documentation

Aligns with the increased transfer pricing expectations that multinational companies are facing globally