Tim Keeling & Divya Dharnidharka explore key changes to the ATO’s Simplified Transfer Pricing Record Keeping Practical Compliance Guideline.
The Australian Taxation Office (ATO) has recently updated Practical Compliance Guideline (PCG) 2017/2 Simplified transfer pricing record-keeping options.
At high level, under the simplified transfer pricing record keeping (STPRK) options, taxpayers can benefit from reduced transfer pricing documentation and increased certainty. To utilise one of the various STPRK options requires the satisfaction of relevant eligibility criteria.
The updated PCG makes a number of changes to the criteria as well as other aspects. Key changes include the following:
The ATO has recognised that the changes may mean that taxpayers currently utilising the STPRK options may need to revisit their arrangements. As such, the ATO has offered a transitional period where taxpayers can apply the prior STPRK guidance for their first income year commencing on or after 1 July 2018. Notwithstanding this, we would recommend that taxpayers review their transfer pricing arrangements to determine if they may benefit from the new options or plan accordingly should existing arrangements no longer qualify.
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