New Reporting Requirement for Multinationals operating in Australia

From the financial year commencing after 1 January 2016, Australia has adopted the Organisation for Economic Co-operation and Development (OECD) transfer pricing documentation and reporting standards.

This means multinationals need to review their current transfer pricing arrangements in Australia and prepare the information required to ensure compliance with the new requirements.

Under the new measures, multinationals operating in Australia (or consolidated groups with a global parent entity) which have annual global gross income of $1bn or over, are required to provide:

  • Information about where economic activity is undertaken and profits are reported. It will require information about the multinational group’s turnover, taxes and business activities sorted by tax jurisdiction.
  • A high-level description of the group’s global business operations, including an outline of its organisational structure, use of intangibles and intercompany financial activities.
  • Information about the Australian entity’s management structure and business strategy; specific cross-border related party transactional data, including information about how transfer pricing decisions have been made; and financial information, including the local entity’s annual financial accounts.

What Next?

Any multinational groups with business operations in Australia must review their annual global gross income to ascertain whether this is in excess of $1bn. If they exceed this annual global gross income criteria, they will be required to submit the necessary reports.

Contact us for more information or advice.

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