Australia has introduced the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Bill 2013 (“the Bill”) in the House of Representatives for approval. The new transfer pricing regulations will significantly bolster the Australian Taxation Office’s (ATO’s) effectiveness to pursue transfer pricing audits and litigation.
The amendment has a greater focus to establish an appropriate and reliable transfer pricing method taking into consideration not only traditional transactional methods but also the profits based methods.
As per the Bill, citizens will be regarded to have obtained ‘reasonably arguable’ position if transfer pricing documentation specifies unmistakably all the transactions which were attempted with the particulars of the transfer pricing techniques utilized.
