On 26 November the ATO provided further guidance on the application of the STPR options in the form of Frequently Asked Questions (FAQ). In the document the ATO emphasises on the importance of demonstrating compliance with Australia’s transfer pricing rules, even when applying the STPR options, as all taxpayers are still subject to the transfer pricing rules in Subdivision 815-B, C and D of the ITAA 1997 regardless of whether the STPR options are applied.
If a taxpayer applies the STPR options, it will still have to document that it complies with all the eligibility criteria. In the FAQ document, the ATO specifically states that self-assessment by assertion is not sufficient; the ATO expects that taxpayers keep contemporaneous documentation to self-assess the eligibility. In practice this is usually demonstrated via a simplified transfer pricing document that outlines the reasons as to why the STPR option applies to the transaction(s).
Other key points outlined in the FAQ documents are:
 TR 1999/1 Income tax: international transfer pricing for intra-group services.
Singapore is often a preferred location for setting up headquarters as the door to conduct business in Asia. The IRAS has released its views on how Singapore HQ's should plan and implement their transfer pricing framework. Want to know more? Read our article with our views on IRAS TP Guidelines for Singapore HQs.
The Malaysian Finance Bill 2020 incorporates transfer pricing-related changes to the current Income Tax Act, 1967 (“ITA”). The changes permit significantly greater authority to the Malaysia Inland Revenue Board (“MIRB”) and re-emphasises the importance of transfer pricing compliance, with effect from 1 January 2021.
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.