This question seeks information to assess transfer pricing risks arising from royalty and licence fee arrangements between Australian taxpayers and international related parties. We seek to determine the level of these transactions between Australian taxpayers and their international related parties, identify the pricing methodology used in relation to these arrangements and to ascertain the extent to which the taxpayer has transfer pricing documentation to support those dealings.
The dollar amounts or values asked for in this question are all based on your income tax records.
For the purpose of this question royalty or royalties is as defined in subsection 6(1) of the ITAA 1936 and in any applicable double tax agreement in the International Tax Agreements Act 1953 (Schedule 1 – Taipei Agreement) or the Australian Treaty Series. Where there is a conflict between the definition of royalty in subsection 6(1) of the ITAA 1936 and the definition in an applicable double tax agreement, use the definition in the double tax agreement (see subsection 4(2) of the International Tax Agreements Act 1953).
The term licence fee has its ordinary meaning.
If you had international related party dealings involving royalties or licence fees during the income year, answer Yes at A item 6 and complete the required fields.
Item 6a is completed as follows:
- At C, write the total amount of royalties payable by you to international related parties claimed as deductions for the income year.
- At D, write the total amount of royalties you derived from international related parties included in your assessable income for the income year.
- At E, write the Appendix 5 code for principal arm's length pricing method used to set or review consideration for the royalties payable by or derived by you.
- At F, write the Appendix 9 code for the percentage of your international related party dealings involving royalties for which you have documentation.
Percentage of dealings with documentation refers to the aggregate dollar amount of transactions reported at this question for which you have relevant documentation expressed as a percentage of total dollar value of transactions reported at this question.
Item 6b is completed as follows:
- At C, write the total amount of licence fees payable by you to international related parties claimed as deductions for the income year.
- At D, write the total amount of licence fees you derived from international related parties included in your assessable income for the income year.
- At E, write the Appendix 5 code for principal arm's length pricing method used to set or review consideration for the licence fees payable by or derived by you.
- At F, write the Appendix 9 code for the percentage of your international related party dealings involving licence fees for which you have documentation.
Percentage of dealings with documentation refers to the aggregate dollar amount of transactions reported at this question for which you have relevant documentation expressed as a percentage of total dollar value of transactions reported at this question.
Question 7
This question seeks information to assess transfer pricing risks arising from rent or leasing arrangements between Australian taxpayers and international related parties. We seek to determine the level of these transactions between Australian taxpayers and their international related parties and identify the pricing methodology used in relation to these arrangements.
Rent and lease or leasing have their ordinary meaning and will include hiring of chattels.
The dollar amounts or values asked for this question are all based on your accounting records.
If you had international related party dealings involving rent or leasing during the income year, answer Yes at A item 7 and complete the required fields.
At C, write the total amount of rent and leasing charges or fees incurred by you in your dealings with international related parties.
At D, write the total amount of rent and leasing income you earned or derived from your dealings with international related parties.
At E, write the Appendix 5 code for principal arm's length pricing method used to set or review consideration for the rent and leasing arrangements with international related parties.
At F, write the Appendix 9 code for the percentage of your international related party dealings involving rent or leasing for which you have documentation.
Percentage of dealings with documentation refers to the aggregate dollar amount of transactions reported at this question for which you have relevant documentation expressed as a percentage of total dollar value of transactions reported at this question. If you applied one of the simplified record-keeping options in PCG 2017/2 Simplified transfer pricing record keeping options for these dealings, write code 7 at F.