AUSTRALIA Law and Practice Contributed by: Michael Clough, Jerome Tse, Judith Taylor and Scott Heezen, King & Wood Mallesons
6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information
7.4 Limits on Taxpayers/Transactions Eligible for an APA The ATO has a list of transactions and conditions which would qualify and those which would not.
Australia has an extensive network of double tax agreements that include information sharing clauses. Australia is also a party to the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. 6.2 Joint Audits The ATO regularly shares information with other countries’ revenue authorities and sometimes conduct joint investigations. Australia’s secrecy laws permit the ATO to share information under various treaties. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Australia will consider entering an APA which could be unilateral, bilateral or multilateral. 7.2 Administration of Programmes Australia’s competent authority (CA) administers the programme. The Commissioner of Taxation, who leads the ATO, or their delegate is the cur - rent CA. 7.3 Co-Ordination Between the APA Process and Mutual Agreement Procedures In Australia, the same unit of the ATO admin - isters both APAs and mutual agreement pro - cedures (MAPs). It would be likely that an APA would be pursued before a MAP. Practically, a failure to reach a bilateral APA would likely result in an unsuccessful MAP request.
They can be found in PS LA 2015/4. 7.5 APA Application Deadlines
There is no strict time limit for filing an APA appli - cation. Usually, the years covered by an APA will commence from the time of request. There are “roll back” provisions to apply the APA to an ear - lier year but this is by agreement only and not guaranteed. 7.6 APA User Fees There is no user fee for seeking an APA. 7.7 Duration of APA Cover Most APAs cover a period of three to five years. 7.8 Retroactive Effect for APAs An APA can be rolled back to prior years by agreement with the ATO depending on several factors including whether the APA was voluntar - ily requested in advance of any audit activity. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences Transfer pricing adjustments attract significant penalties: up to 200% of the tax shortfall. Remis - sion (partial or otherwise) is available if adequate documentation of adoption of a reasonable methodology, with supporting material, is pro - vided. Failure to keep records and documenta - tion specifically required by the transfer pricing rules will result in no remission.
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