Australia taxation: Australian Taxation Office (ATO) has released its Annual Compliance Program

The Australian Taxation Office (ATO) has released its Annual Compliance Program for the 2010 financial year, which outlines the ATO's compliance strategies and priorities for the year ahead. Transfer pricing features as a key area of Australian Taxation Office (ATO) activity – the Australian Taxation Office (ATO) has flagged that it is concerned with profit shifting and tax-driven business structures involving nonarm's length charges. Other highlights of the program include:

(1) in the small to medium business segment (turnover of AUD 2 million to AUD 250 million), the Australian Taxation Office (ATO) plans to initiate more than 300 new reviews;

(2) in the large business market, the Australian Taxation Office (ATO) will use additional resources to cover around one-third of taxpayers through a range of compliance activities and products;

(3) the Australian Taxation Office (ATO) is focused on business restructuring, financing issues (loans and guarantee fees) and the provision of services by Australian headquartered companies to overseas subsidiaries at no charge; and

(4) work continues on the redesign of the Australian Taxation Office (ATO) program for APAs.