The SCI aimed to increase scrutiny by the ATO on taxpayers viewed  as high risk for non-compliance with transfer pricing rules, leading to "low to medium consequences" for any breaches found. It involved taxpayers being sent a questionnaire about their transfer pricing policies to establish what further action, if any, was needed.

"There has been increased scrutiny as part of the ATO’s strategic compliance initiative, with the ATO issuing information requests to companies assessed as having significant international related-party dealings, with questions focusing on business restructuring, intragroup financing, including guarantees and profitability," said Fiona Criag a transfer pricing partner at Deloitte in Sydney. "A further portion of the information requests targeting companies operating in the mining services industry [which is] a large sector in the Australian economy [have also been sent out]."

Another adviser said he had seen an increase in transfer pricing scrutiny over a number of years.

“The tax management functions of our large corporate clients are acutely aware of these issues and have been taking active steps to monitor any exposure," said Allan Blaikie, a tax partner at Clayton Utz in Sydney.

Based on the experience of its clients, PricewaterhouseCoopers reports that “many taxpayers found the questions to be relatively open-ended, unclear and sometimes ambiguous. As a result, providing answers was sometimes more difficult than had been initially expected”.

"While many of the questions seem straightforward on the surface, years of debate at both local and international forums, without resolution, lurk behind some of the issues which the ATO is targeting," said Craig. "Many clients are aware of the potential complexities and are simply seeking input on the latest thinking; others are seeking our advice to better understand the outcome when transfer pricing principles overlay particular commercial facts and circumstances."