Double Penalties for Tax Avoidance and Transfer Pricing Schemes

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 admin@transferpricingsolutions.com.au www.transferpricingsolutions.com.au.

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Transfer pricing documentation and benchmarking analysis are critical to defending your transfer pricing risks from the tax authorities. But HOW do you get them right? The reality is the theory and practice of preparing documentation and benchmarking analysis are very different, hence the importance of practical insights.
Transfer Pricing Solutions have designed a practical transfer pricing 101 workshop that will provide you insight that is not printed in the legislation, rulings or other documents.