AUSTRALIA Trends and Developments Contributed by: Michael Clough, Jerome Tse, Judith Taylor and Kai-Chen Lamb, King & Wood Mallesons
has decreased considerably, they are still focussed on ensuring multinationals pay their correct amount of tax. The focus is directed increasingly to intangibles (especially non- existent or underpriced royalties). • That focus is being extended to a greater number of non-resident companies. • Reviews have been more targeted with fewer transfer pricing audits. Information requests are far reaching and costly to respond to. On the other hand, position papers are much more detailed. Taxpayers under audit experi - ence considerable delays by the ATO. • Although the ATO has released guidelines intended to simplify record-keeping for trans - fer pricing, the adequacy of documentation remains a key area of dispute, especially in the context of penalties. Country by Country reporting has added to this burden.
• For non-residents wishing to invest in Austral - ia, a recommendation of the Foreign Invest - ment Review Board to the Federal Treasurer to approve the acquisition is required. Tax is one of the key considerations and significant inquiries are made by the ATO to ensure that the structure, financing and related party arrangements comply with the transfer pricing laws. The recent trend for most approvals is that onerous tax conditions are attached. • The ATO has aggressively been challenging claims for client/attorney privilege. This is especially so in the area of transfer pricing and related structuring or financing.
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