Intercompany loans continue to be a hot topic and focus point for the Tax Authorities around the world as this type of transactions are considered high risk from a transfer pricing prospective. If your company has entered into intercompany loans it is critical to assess any transfer pricing risk related with the transaction and to have evidence of compliance with the arm’s length principle.
Under Australia’s new transfer pricing legislation, demonstrating the arm’s length nature of the interest rate only will not provide taxpayers with sufficient compliance with the arm’s length principle. Taxpayers will also have to include the following information in their transfer pricing documentation:
Taxpayers are advised to review and/or prepare transfer pricing documentation to provide evidence of compliance with the arm’s length principle ensuring that the above information is included as part of the transfer pricing analysis.
For more information please contact Transfer Pricing Solutions on 03 5911 7001 or email firstname.lastname@example.org.
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?