Published on 01 Sep 14
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
It has long been argued that the Australian Taxation Office’s expectations as to transfer pricing (TP) documentation from SME taxpayers is not only a time-consuming administrative burden, but also a considerable compliance cost bur den. Recently, the ATO commenced a TP documentation “simplification” project for what it regards as “low-risk” dealings by small taxpayers with a turnover of up to $25m and small distributors with a turnover of up to $50m. The outcome of this project, for an initial test period of three years, will be that “safe harbours” will apply to those entities that satisfy the ATO’s “low-risk” criteria. Formalisation of administrative concessions in this regard is expected later in 2014. This will be welcome news for eligible taxpayers, as their compliance costs should reduce significantly.
This article examines the ATO’s proposals and, while commending the ATO for this initiative, argues that the proposals do not go far enough in their present form.
Stuart is an Associate Director with Moore Stephens.
Current at 1 September 2014