Australia issues guidelines for simplified transfer pricing record-keeping

by Davide Anghileri

The Australian Taxation Office (ATO), on 22 February, released Practical Compliance Guideline PCG 2017/2 (PCG 2017/2), outlining simplified transfer pricing record-keeping options to minimise record-keeping for eligible taxpayers.

PCG 2017/2 offers practical procedures to comply with relevant tax laws. It aims to reduce the cost of compliance and compliance burden for eligible taxpayers, offering an administrative safe harbour to allow taxpayers to better manage risks associated with international related party dealings.

The simplified TP record-keeping options are available, subject to a number of qualifying conditions, to small taxpayers, distributors, low-level inbound and outbound loan transactions, certain intra-group services (including technical, management, and administration services), and taxpayers with a low level of international related-party dealings.

The eligibility for simplified transfer pricing record-keeping is self-assessed by taxpayers, who must disclose this choice to the ATO in their annual International Dealings Schedule, PCG 2017/2.

To determine eligibility, the ATO may also request documents of proof from taxpayers, but generally will not perform a transfer pricing audit of the eligible related-party dealings.

Moreover, PCG 2017/2 states that taxpayers that chose simplified transfer pricing record-keeping are still required to comply with ordinary record-keeping requirements and are expected to transact on an arm’s length basis.

Taxpayers are also expected to maintain contemporaneous transfer pricing documentation for the eligible dealings they have applied.

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Davide Anghileri

Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.

Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues. He can be reached at danghileri@yahoo.it.

Davide Anghileri

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