Documentation requirements

You must keep documentation that can substantiate compliance with the arm's length principle.

Taxation Ruling TR 2014/8 Income tax: transfer pricing documentation and Subdivision 284-E provides information on how to demonstrate that you have complied with the principle.

There are reasons why you must document compliance with the arm's length principle, namely to:

• reduce the risk of audit by us, and dispute with us
• help explain your position to us
• minimise penalties in the event of an audit adjustment, as any penalties will take into account the extent and quality of the documentation kept.