• Service: Tax, Global Transfer Pricing Services, International Tax
  • Type: Regulatory update
  • Date: 5/14/2014

Australia - Draft rulings on transfer pricing reconstruction authority, documentation 

May 14:  The Australian Taxation Office (ATO) released two draft rulings setting forth its position on recently codified measures for “reconstruction” authority and for new documentation requirements under the transfer pricing regime of the Australian tax law.
  • The first draft ruling—TR 2014/D3—sets forth the ATO position as to when it can and will use its reconstruction authority in transfer pricing cases. The reconstruction authority significantly increases the ATO’s transfer pricing powers.

    Read a May 2014 report [PDF 77 KB] prepared by the KPMG member firm in Australia.

  • The second draft ruling—TR 2014/D4—sets forth the ATO position on transfer pricing documentation that an entity must prepare and maintain. The codification of the structure of transfer pricing documentation imposes a more stringent documentation standard—linking documentation to the “reasonably arguable position” standard that exists within the evidentiary requirements of the general income tax provisions.

    Read a May 2014 report [PDF 84 KB] prepared by the KPMG member firm in Australia.

KPMG observation

The two draft rulings are viewed by tax professionals as extremely important for transfer pricing purposes in Australia because the draft rulings underpin the application of new laws, and indicate a commitment by the ATO to apply the reconstruction authority and transfer pricing documentation requirements broadly.

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

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now