With cross border related transactions being of particular investigative focus for the Australian Taxation Office (ATO), G+T’s tax advisory experts have developed an innovative tool to help businesses understand and manage the risks associated with their financing arrangements.

Developed entirely in-house as part of G+T’s on-going focus on leveraging technology to transform and streamline the delivery of legal services, the calculator has been designed to review both in-bound and out-bound financing arrangements and provide users with a tax risk rating according to the relevant features of their transaction and the profile of the parties involved. The tool also offers guidance on the likely approach of the ATO in allocating its compliance resources to reviewing and auditing their specific financing arrangements.

The calculator is also suitable for foreign investors who are required to make Foreign Investment Review Board (FIRB) applications with applicants often required to disclose the risk rating for new and existing financing arrangements.

The calculator was developed in line with the ATO’s guidance in PCG 2017/4 and is available as free online resource on G+T’s website for anyone considering a related party transaction.

G+T’s Tax Partner Muhunthan Kanagaratnam, who led the development of the calculator, said with the use and application of related party financing arrangements under greater scrutiny from the ATO, the firm saw an opportunity help simplify the ATO guidelines for their clients, creating an easy, interactive way to review specific tax risk and enable more efficient and informed business decision-making.

Muhunthan said, “We found ourselves undertaking these assessments for many of our clients, simply because they found it difficult to understand and apply the ATO’s guidance in their particular circumstances. Our goal in developing this tool has been to remove much of the confusion and make it easier for any interested user to assess their risks using the available guidance in most cases. Of course, we are here to help clients with unusual circumstances that require explanations to the ATO and FIRB.”