Martin Zetter provides an overview of recent developments
The Australian Taxation Office has issued draft taxation rulings and draft practice statements on the new transfer pricing rules that were introduced last year.
Draft ruling TR 2014/D3 covers the relevance of the actual commercial or financial relations to identifying arm’s length conditions. Where the form of those relations is inconsistent with the substance related-party transactions can be disregarded. This may be where the substance of arrangements between independent parties would have differed or where independent parties would not would not have entered such arrangements at all. The other drafts issued deal with documentation and penalties. Australia obliges taxpayers to prepare transfer pricing documentation in advance of making tax filings. Otherwise the full rather than a reduced penalty regime...
