Australia: Performance audit report on management of transfer pricing for related-party debt
The audit was done to provide assurance to the Parliament that the ATO “effectively manages transfer pricing for related party debt.”
The Australian National Audit Office (ANAO) released its performance audit report on the Australian Taxation Office’s (ATO) management of taxpayers’ use of transfer pricing for related-party debt.
The report states that the ATO is largely effective at identifying and managing transfer pricing risks for related-party debt and has established a largely effective strategic framework to manage taxpayers’ use of related-party debt.
The Auditor-General made four recommendations:
- Determine the number of assurance reviews required to gain assurance
- Analyze and record why entities may not file reports
- Scrutinise taxpayers who choose not to use the ATO’s primary engagement mechanism
- Improve training
In response, the ATO agreed to three of the four recommendations and agreed in principle to one.
The audit was done to provide assurance to the Parliament that the ATO “effectively manages transfer pricing for related party debt.”