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“Practical” safe harbours and Australia’s transfer pricing rules

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Published on 01 May 19 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

In the context of complex intra-group dealings, the ATO is placing increasing reliance on the use of practical compliance guidelines (PCGs) to inform the market as to their view of transfer pricing risk for specific categories of international dealings. These PCGs can therefore assist Australian taxpayers in understanding transfer pricing issues of concern to the ATO and how to focus economic analyses demonstrating compliance with the transfer pricing provisions. Of critical importance, though, is the way PCGs are used by the ATO. Their legal status does not go beyond that of a statement of the ATO’s view of risk, so it is important the transfer pricing “risk indicators”, being the key element of the PCGs, are not linked to arm’s length outcomes.

Author profile

Michael Jenkins CTA
Michael Jenkins, CTA, is an EY transfer pricing partner based in Melbourne. He has worked in the field of transfer pricing since the 1990s. His transfer pricing expertise includes dispute resolution while in practice; and as the leader of the ATO’s APA/MAP unit and Australian competent authority. He was heavily involved in the development of Australia’s transfer pricing rules (Division 815) and was an Australian delegate to the OECD’s transfer pricing working party (WP6) 2010-2018. - Current at 04 June 2025
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