The Australian government has released details on the how the tax office (ATO) will respond to taxpayer requests for help determining customs duty values following a transfer pricing adjustment.
The guidance, issued April 14, applies when the ATO adjusts an entity’s taxable income or loss because of a transfer pricing benefit but, because of the transfer pricing method used, the change is not attributed to the individual components of the purchases relating to the value of the imported goods. This makes it difficult for taxpayers to obtain a refunds of customs duty or determine additional duty liabilities.
The guidance, PS LA 2016/1, details how ATO staff should respond to an entity’s request for assistance. Documentation, such as an adjustment table, can be prepared by ATO staff for use by the taxpayer to inform the Australian Border Force as to the arm’s length value of the goods, the guidance states.
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