The Australian Treasury released an exposure draft bill to impose stronger penalties to combat tax avoidance and profit shifting. The draft legislation will apply to companies with annual global revenue exceeding AU$1 billion that are obliged to comply with the Country by Country (CbC) reporting.
Taxpayers failing to comply with the CbC reporting on time will result in late lodgement penalties. Double penalties will be imposed to taxpayers that do not have a reasonable arguable position (e.g. transfer pricing documentation). Increased penalties apply to any scheme benefit an entity gets on or after 1 July 2015, regardless of when the scheme was entered into.
This draft legislation significantly increases the importance of having transfer pricing documentation that can provide a RAP under Subdivision 284-E.
For more information about these penalties please contact Transfer Pricing Solutions on firstname.lastname@example.org www.transferpricingsolutions.com.au.
Thec Covid-19 pandemic has triggered the most severe recession and is causing enormous damage to the world economy. The economic downturn will impact a group’s transfer prices, analysis and documentation, more so with the BEPS Action Plans in place and the high level of transfer pricing scrutiny across the globe.
JobKeeper forms part of taxable income in the tax return. Makes sense, it is a subsidy against wages, so I am sure there are no surprises there, but how do you assess the arm’s length financial outcomes of the entity for transfer pricing purposes?
The ATO expect that Australian entities will retain the benefit of the JobKeeper payment they receive. So how do you treat the JobKeeper payments for transfer pricing purposes?