Australia Proposes Guidance on Low-Risk Software Payment Audits

Australia is seeking industry input for new proposed guidance on when certain cross-border software payments won’t attract an audit from tax authorities.

The guidance released by the Australian Tax Office on Wednesday details two risk zones that arrangements may fall into: one, dubbed the white zone, in which further risk assessment isn’t required, and another, the green zone, in which the ATO won’t review an arrangement other than to verify it’s permissible.

Arrangements that don’t fall into either zone aren’t covered by the draft guidance.

The guidance is meant to be read with another ruling that details the ATO’s position ...