On 22 November 2012 the Assistant Treasurer, the Hon David Bradbury MP, released an exposure draft of proposed amendments to Australia’s transfer pricing rules. The exposure draft package includes the draft legislation and draft explanatory memorandum.
These reforms were announced by the Hon Bill Shorten MP on 1 November 2011. The proposed amendments are designed to modernise the transfer pricing rules contained in Australia’s domestic law, ensuring that they better align with the international standards set out by the Organisation for Economic Co-operation and Development (OECD).
The exposure draft legislation proposes amendments in the following areas:
- cross-border transfer pricing
- the arm’s length principle for cross-border conditions between entities
- the arm’s length principle for permanent establishments, and
- record-keeping requirements and penalties.
Submissions are due by Thursday, 20 December 2012.