On February 11, 2016 the Australian Government announced that it was seeking for stakeholders’ views on adopting the new OECD guidance as provided in the OECD Report ‘Aligning Transfer Pricing Outcomes with Value Creation’ (Final report on BEPS Action 8-10) in the context of the Australian tax system. With February 26, 2016 being the closing date for submissions, stakeholders who would like to provide input should however note that the consultation period is relatively short.
According to the consultation document the Australian Government seeks feedback on the following questions:
· Would there be any significant unintended consequences for Australia if these recommendations are incorporated as relevant guidance for the purposes of applying Division 815 of the ITAA 1997?
· Are there any significant challenges with commencing the new Guidance for income years starting on or after 1 July 2016?
· It is envisaged in section 815-135 of the ITAA 1997 that documents to be relied upon in applying Australia’s transfer pricing rules can be prescribed by way of regulation. Are there any reasons why regulation (as opposed to legislative amendment) is not the appropriate method for incorporating the recommendations contained within the 2015 OECD report.
· 4 What new ATO guidance / explanatory materials do you think the ATO will need to prepare (and what existing ATO guidance / explanatory materials will need to be updated) if the changes by the 2015 OECD Report are adopted?
Click here to be forwarded to the announcement of the consultation as published on the website of the Australian Government attached to which you can find the consultation document. Or click here to be directly forwarded to the consultation document.
The OECD Report ‘Aligning Transfer Pricing Outcomes with Value Creation’ (Final report on BEPS Action 8-10) can easily be found via our very complete BEPS LIBRARY.
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