The Australian Taxation Office (ATO) has updated its guidance on simplified transfer pricing record keeping options to include the minimum interest rate for the simplified option for low-level outbound loans for the 2018 income year, which is set at 3.79%.
Paragraph 75 of Practical Compliance Guideline PCG 2017/2 has been updated to reflect the new rate. Eligible lenders (among other things, entities with a combined cross-border loan balance of $50m or less for the Australian economic group) charging this interest rate may keep reduced transfer pricing documentation for eligible loans.
Furthermore, for each outbound loan the interest rate is not less than the following rates for each of the income years that the loan is in effect:
- 4.91% in the 2015 income year;
- 4.37% in the 2016 income year;
- 4.34% in the 2017 income year; and
- 3.79% for the 2018 income year.
