Strengthening transfer pricing rules
Australia's transfer pricing legislation currently specifies that it be interpreted to achieve consistency with the OECD transfer pricing guidelinesExternal Link as last updated in 2010.
The OECD's final report on Action Items 8-10 of the G20/OECD BEPS Action Plan, transfer pricing outcomes with value creation, recommended revisions to the OECD transfer pricing guidelines.
These revisions provided further clarification on the application on the arm's length principle including in relation to intellectual property and allocation of risk between related parties.
The legislative amendment will ensure that these revisions are considered when interpreting Australia's domestic transfer pricing legislation and will apply from 1 July 2016
The recommendations outlined in the final report, are consistent with the ATO's current approach to transfer pricing (by pricing economic substance) under Division 815 of the Income Tax Assessment Act.
Legislation and supporting material
- Legislation is currently being developed for this measure.
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Australia is strengthening its transfer pricing rules, by bringing them into line with the OECD's 2015 transfer pricing recommendations.