ATO guidance on inbound distributors : How green are your profits?

Tax Insight : March 2019 / Australia

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.

This newsletter explains the following topics;

  1. Snapshot
  2. What does PCG 2019/1 say?
  3. What does this mean for taxpayers with distribution arrangements in Australia?
  4. Concerns with the ATO approach
  5. Potential silver lining?

>> Click for Japanese [豪州移転価格税制:ATO新規公表 在豪輸入販売会社へのリスク評価]

(383KB, PDF)

* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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