The Australian Taxation Office (ATO) has released draft guidance on the new transfer pricing rules that were enacted in 2013. The guidance addresses the topics of documentation, penalties, and the circumstances in which the law requires actual dealings to be disregarded and ‘reconstructed’ with hypothetical arm’s length dealings.
Although the guidance sheds some light on how the ATO will apply certain aspects of the new rules, much of the content does not go beyond what was included in the explanatory memorandum to the new rules and there are several interpretative questions that remain unanswered.
This article provides a brief summary of key aspects of the new guidance. We will issue a more detailed analysis of the new guidance in later articles.