Australia Taxation Office Issues Guidance on Transfer Pricing Rules for Inbound Distribution Arrangements

The Australian Taxation Office (ATO) March 13 issued guidance on transfer pricing issues related to inbound distribution arrangements. The guidance explains: 1) the definition of inbound distributors; 2) the compliance approach and risk assessment framework for low, medium, and high-risk levels; 3) the risk assessment method of comparing the profit outcome of inbound distribution arrangements to the ATO’s profit thresholds for inbound distributors; 4) the advance pricing arrangement program; and 5) the reduction of shortfall penalties for businesses that adjust inbound distribution arrangements to meet low-risk level conditions. The guidance takes effect the same date for existing and new inbound ...