The Minister for Financial Services and Superannuation, the Hon Bill Shorten, released a Consultation Paper on the changes to the transfer pricing rules as part of a consultation process to provide interested parties with an opportunity to comment.
The Government announced on 1 November 2011 that it would introduce changes to the existing transfer pricing rules, to bring them in line with Australian and international developments in the area.
This Consultation Paper outlines the history of the transfer pricing rules, as well as a number of suggested areas for change. These include the introduction of an arm’s length standard that reflects the international norms, interpretation of new rules in a manner that best secures consistency with OECD guidance and application of the new rules on a self-assessment basis.
The Consultation Paper further discusses other related issues including methodologies for determining an arm’s length outcome (as well as criteria for their selection), comparability standards, and documentation and penalty provisions.