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Australia: Transfer pricing arrangements and JobKeeper payments, updated guidance (COVID-19)

Australia: Transfer pricing arrangements

The Australian Taxation Office (ATO) released updated information addressing the treatment of JobKeeper payments in transfer pricing arrangements.

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The JobKeeper program was established to provide employment-related relief in response to the coronavirus (COVID-19) pandemic.

According to the updated ATO guidance, the ATO will assess the effect of the JobKeeper payment on transfer pricing arrangements by reviewing arrangements when the JobKeeper payment:

  • Resulted in a change to the transfer price paid or received by the Australian entity
  • Was shown to effectively shift the benefit of the government assistance to offshore related parties

The guidance states that generally, the ATO would not expect independent parties in comparable circumstances to share the JobKeeper benefit, and the ATO has not observed independent parties sharing government assistance payments.

The ATO released guidance in July 2020 on the treatment of JobKeeper payments in transfer pricing arrangements. Read TaxNewsFlash

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