08
March
2019
|
02:43
Australia/Melbourne

Bupa Australia reaches in-principle agreement in transfer pricing dispute

Bupa Australia has reached an in-principle agreement with the Australian Taxation Office (ATO) to settle a number of disputed matters, including a transfer pricing issue relating to the funding of its Australian acquisitions in the 2007 and 2008 years.

While Bupa Australia considers the positions it adopted were in accordance with Australian tax law and the settlement will involve no admission of liability by Bupa Australia, the settlement will fully resolve all audit matters in dispute between Bupa Australia and the ATO for the 2007 to 2018 years.

Under the settlement, Bupa Australia will pay a total of approximately A$157 million to the ATO, reflecting taxes, interest, penalties and an offset for overpaid withholding tax for the 2007 to 2018 years.

The settlement will provide certainty for both Bupa Australia and the ATO in relation to the taxation treatment of Bupa Australia’s future cross border funding costs, which will be within the ‘low risk’ or ‘green zone’ rating in accordance with the risk framework set out in the ATO’s Practice Compliance Guideline PCG 2017/4.

Bupa Australia said: “We are pleased to reach this in-principle agreement. Importantly, the settlement will provide clarity for Bupa Australia and the ATO in relation to how taxes will be assessed in the future. This certainty allows us to continue to focus on delivering healthcare services to our customers.”

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