In media release issued on 25 October 2012, the Inspector-General of Taxation (IGOT), Ali Noroozi, announced terms of reference for his review into the ATO's management of transfer pricing matters and called for stakeholder submissions.
The IGOT said that stakeholders' concerns may be summarised as follows:
- ATO advice and guidance – a need for clearer, more consistent and comprehensive ATO advice. An extensive review through an appropriate and transparent consultation process was also advocated;
- ATO compliance approach, processes and practices – risk reviews, audits, Advance Pricing Arrangements and Mutual Agreement Procedures have been claimed to be inefficient and very costly. Specific concerns included information requests, timeframes, lack of transparency and communication;
- ATO capability – ATO officers are believed to have varied levels of capability regarding knowledge of the transfer pricing regime, economics and business. Concerns were also raised with the ATO's organisational arrangements for dealing with transfer pricing matters in the large business segment.
Submissions will be treated as confidential and due by 23 November 2012.