The ATO [on Thur 26.2.2015] issued Practice Statement PS LA 2015/3 outlining the approval process where the Commissioner relies on s 815-130(2) to 815-130(4) of the ITAA 1997 [the ‘restructuring power’] to identify arm’s length conditions in relation to cross-border transfer pricing. It does not apply in instances where ATO personnel are merely re-pricing an entity’s actual conditions in accordance with the “basic rule” in s 815-130(1).

According to the Practice Statement, in considering whether any of the exceptions to the basic rule in s 815-130 may apply to an entity in a particular instance, ATO personnel must:

  • notify the Internationals section of the Public Groups and International business line (PG&I) of the existence of the matter for tracking of such cases;
  • engage relevant technical experts as early as possible. In the case of the PG&I, the relevant technical experts in the Technical Leadership Group or Internationals section of PG&I. In the case of the Private Groups and High Wealth Individuals business line (PGH), the relevant technical experts in the Technical Excellence Services stream of PGH or those mentioned above for PG&I; and
  • raise the matter with the taxpayer and give them the opportunity to clarify the facts and address any concerns that the ATO may have.

Date of effect – Applies on and from 26 February 2015.

[LTN 38, 26/2/15]