Asia-Pacific Transfer Pricing Handbook

Chapter Four

Australia’s Advance Pricing Arrangement Program

Australia Continues to apply its advance pricing arrangement (APA) program. According to the November 2008 APA Program report, Australia increased the issuance of its APAs in 2007–2008 compared with that of prior years. The Australian Tax Office (ATO) completed 48 APAs during the 2008 financial year, comprising these activity categories:

• 30 APAs are renewals that result from existing APAs
• 7 APAs are new APAs that arise as result of the ATO’s compliance activity and the ATO’s involvement in the transfer pricing review and audit process
• 11 APAs are new APAs, unprompted by the ATO

Taxpayers at all size levels can request APAs. These taxpayers include large businesses and small to medium enterprise markets. Large businesses with revenues of more than A$250 million more readily use APAs than do smaller businesses. The ATO completed two-thirds of its APAs with large business taxpayers in 2007–2008 year. The ATO completed the remaining one-third of the APAs with small to medium businesses.

The completed APAs cover a wide range of related party inbound dealings and cover a wide range of related party outbound dealings. These APAs include purchases and sales of these business activities:

• Consumer products
• Medical products
• Business products
• Information technology software and hardware
• Business and management services
• Metals and minerals

The businesses that apply for an APA include these activities:

• Agency permanent establishments ...