ATO guidance on inbound distributors - 26 March 2019
How green are your profits?
On 13 March 2019, the ATO released Practical Compliance Guideline PCG 2019/1, which sets out 'profit markers' that the ATO will use under its compliance approach to assess the transfer pricing (TP) risk of inbound distribution arrangements. This is the finalised version of the PCG which had been released in draft in November 2018 as PCG 2018/D8.
Inbound distributors should self-assess their results against the ATO's profit markers to determine the ATO view of the relevant risk zone and hence the resultant level of ATO scrutiny they may face. If affected taxpayers need to prepare a Reportable Tax Position (RTP) schedule, the result of this self-assessment should be disclosed therein.