Shiv Mahalingham, a managing director in Duff & Phelps European transfer pricing practice, provides insight on Australia adopting simplified transfer pricing documentation. In addition to simplified reporting requirements, the guidance introduces a number of safe-harbors for intra-group transactions.
The Australian Taxation Office ("ATO") have acknowledged in recent guidance (Practical Compliance Guidance PCG 2017/2) that existing transfer pricing requirements "may impose an administrative burden disproportionate to your risk of not complying with the transfer pricing rules." The revised guidance provides a reduced documentation requirement for certain situations that include:
- Small taxpayers
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Distributors
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Intra-group services
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Low level inbound loans
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Materiality
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Management and administration services
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Technical services
- Low level outbound loans
