• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/28/2014

Australia - Corporate officers must attest to arm’s length transactions 

August 28: Public officers responsible for signing Australian corporate tax returns are now required—on a self-assessment basis—to sign off on their company’s transfer pricing arrangements.

Australia’s new transfer pricing rules (contained within Subdivision 815-B of the Income Tax Assessment Act 1997, and Subdivision 284-E in Schedule 1 to the Taxation Administration Act 1953) provide that public officers responsible for signing Australian corporation tax returns, containing an international dealings schedule, must sign off on the transfer pricing arrangements, under a self-assessment basis—a first in relation to transfer pricing.

Accordingly, a public officer must be satisfied that the company has met the requirements of Subdivision 815-B—requirements that are more onerous than in the legislation it replaced. For example, the new rules require a public officer to be satisfied that the actual conditions surrounding the company’s international dealings are consistent with those that would occur between unrelated parties acting at arm’s length.

KPMG observation

The task required to be undertaken by a public officer responsible for signing the corporate income tax return in the context of self-assessment is very similar in scope to the higher standard of transfer pricing documentation required by the new legislation. Still, companies may want to view this new standard as an opportunity to get their transfer pricing policies and documentation in order.

Read an August 2014 report prepared by the KPMG member firm in Australia: Australian transfer pricing, a new obligation for Public Officers...?

Contact a tax professional with KPMG's Global Transfer Pricing Services.

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