The ATO will embark on a review of the advance pricing arrangement (APA) program that provides a valuable service delivering certainty on client dealings with international related parties.
“We remain committed to the APA service and always look for opportunities to improve, ensuring it aligns with our broader objectives and market guidance,” the ATO said.
“As such, we will be undertaking a review of the program in 2022, primarily to focus on whether the APA product continues to be providing the right service for all taxpayers and assuring transfer pricing risk in the most efficient manner possible.
“As part of the review, we will consider how to tailor the APA process to better align to risk and taxpayer behavioural indicators.”
The ATO noted it has already streamlined the APA product for early engagement requests from the medium and emerging market, where a combined triage and APA review workshop is used with less intense work during the APA application stage.
“We are now exploring how to similarly tailor the APA experience across the full spectrum of potential risks encountered during an APA engagement,” the ATO explained.
“The review will commence in early 2022. We expect to consult extensively with taxpayers and advisors as part of the process to understand the market perspectives of the APA product, why it is appealing and what arrangements/transactions are viewed as most desirable for an APA.”
The ATO will notify all interested parties when consultation opens.
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.