The amendments relate to the Australian Customs transfer pricing Statement No PS2009/21 on applying for valuation advice on transfer pricing.
The changes will place a greater emphasis on valuation methodologies. While the guidance will still acknowledge transfer pricing documentation, it will also look towards valuation methods such as the identical and similar goods methods, which can sometimes be impractical for taxpayers.
Instead of the bulk-amendment process which Australian taxpayers use after a post-importation transfer pricing adjustment, the changes will require line-by-line import entry adjustments, adding to taxpayers’ compliance in this already uncertain area of transfer pricing.
Australian Customs will become stricter in its approach to transfer pricing adjustments that change the customs value of duty-free goods, or any results in a tax refund.
The list of documents that a taxpayer must supply Australian Customs will also probably increase. As the requirements stand, Australian Customs has described the types of documents that it finds useful when considering transfer pricing issues.
These changes are open to public consultation and, combined with other changes to the transfer pricing regime in Australia, they could add significantly to taxpayers’ compliance burden. It is therefore important for taxpayers to assess the practicality of these changes.