The Australian Tax Office (ATO) is currently actively focused on the pharmaceuticals and life sciences industry. As an industry dominated by multinational organisations and cross-border value chains, international tax issues and transfer pricing are at the heart of the ATO’s focus.
The most recent movement began in 2015 with the Senate inquiry into multinational tax avoidance for which many pharmaceuticals and life science companies were called to appear. It now seems that the ATO feels compelled to review the industry given the political and public interest in multinationals corporations “paying their fair share of tax.” The ATO has been otherwise buoyed by the base erosion and profit shifting (BEPS) movement that has occurred in parallel, new laws in Australia, and the fact that the taxpayer bears the onus of proof. This means that more than ever, taxpayers need to consider transfer pricing when:
With a focus on the industry and the “justified trust” program in full flight, ATO engagement is not a case of “if” but “when” for many taxpayers in the pharmaceuticals and life sciences industry. Active management and preparation may be the best strategy for navigating ATO inquiries.
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Australia:
Jeremy Capes | +61 2 9335 7665 | jeremycapes@kpmg.com.au
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.