This content is from: Australia
Australia evaluates impact of COVID-19 on transfer pricing
Eddie Ahn of DLA Piper discusses how the Australian government has moved to assist business and taxpayers affected by the coronavirus outbreak.

- Emphasis will be placed on taxpayers gathering sufficient evidence to support any changes to, or impacts on, business as a result of COVID-19, including to the functions, assets or risks of any Australian entities.
- The ATO acknowledges that an analysis of comparables may not reliably support arm’s-length outcomes, due to the impact of COVID-19, particularly in the short term. As such, the ATO may seek to understand the financial outcomes that would have been achieved by taxpayers ‘but for’ the impact on COVID-19.
- At this time, there are no proposed changes to the profit markers in Practical Compliance Guideline PCG 2019/1 due to COVID-19. This PCG outlines the ATO’s approach to assess risk ratings for Australian inbound distributor arrangements, based on profit margins and functional profile.
- The ATO also notes that existing and in progress APAs may be adversely impacted by COVID-19 and will seek to engage with taxpayers to resolve any issues.
Australia adopts OECD 2017 transfer pricing guidelines
New South Wales flags potential major tax reform
- Replacing property stamp duty with a broad-based land tax;
- Replacing all specific taxes on insurance policies with broad-based taxes;
- A national unified approach to payroll tax; and
- Agreeing on options for increasing the good and service tax (GST) rate and/or expanding the base of the GST.
The recommendations in the report were mainly driven by the economic impact of COVID-19 and also by a broader review of the financial relations and taxing rights of the Federal and State Governments of Australia, following 20 years from when GST was first introduced into Australia. While still in draft and open for public consultation, the report flags potential significant reforms to state taxation in Australia, which may be adopted within NSW and more broadly across Australia, especially in light of economic conditions.
The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2019 Euromoney Institutional Investor PLC. For help please see our FAQ.