Transfer pricing
Australia has had detailed transfer pricing rules since the early 1980's and the Tax Office has been focusing on international related party transactions for two decades. Compliance burdens, documentation requirements and audit activities all create significant administrative and cash costs on companies.
Our transfer pricing experts specialise in providing advice to multinational groups in respect of prices set for cross-border transactions. We are experienced in advising companies on the relevant documentation requirements, assisting in audit defences and advising effective international planning structures.
Sound familiar?We can help you find the solutions to these issues and more:
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How can we help you?
We provide a range of services in the following areas:- Pricing
- Audit defence
- Transfer pricing documentation
- Advance pricing agreements
- Supply chain management
Service details
A detailed description of our transfer pricing services is provided below.
Pricing
The tax law requires that parties to an international transaction, where those parties are related, must charge arm's length prices for their supplies and acquisitions of goods and services. Most goods and services are unique, to a greater or lesser extent. Therefore, it is almost impossible to determine what is arm's length from just analysing the market. Our corporate and international tax experts are skilled in analysing prices and in completing comparability studies, in order to determine what the most appropriate arm's length price.
Audit defence
Following a five year hiatus, the Tax Office is once again focussing on transfer pricing and many businesses are found to have insufficient support for their cross-border prices. Our corporate and international tax experts have significant experience in assisting clients to manage their Tax Office audits, to defend the clients' prices and their documentation, and to minimise penalties and interest.
Transfer pricing documentation
The Commissioner of Taxation says that all prices in internatational related party dealings must be supported by adequate documentation. Such documentation must analyse the transactions, complete comparability studies and determine the arm's length prices. Without such documentation, an audit process is more difficult, it is hard to argue against any Tax Office adjustment and, where there is an adjustment, penalties will be charged. Our corporate and international tax experts specialise in providing transfer pricing documentation that complies with the Commissioner's requirements, to ensure that your prices are supported and to minimise any penalties.
Advance pricing agreements
Advance pricing agreements are made with the Tax Office and/or with one or more foreign tax jurisdictions to agree prices paid in international related party dealings for a period in the future. We encourage those who want to obtain such agreements to talk to our corporate and international tax experts who are skilled in negotiating these with the Tax Office.
Supply chain management
Many international groups restructure their supply chains, setting up specialist centres (such as manufacturing and back-office centres) in low-cost jurisdictions and minimising the responsibilities of sales offices. Our corporate and international tax experts assist clients to undertake such reorganisations, review any such reoganisations to ensure that there are no unnecessary tax costs and re-evaluate intragroup prices in light of such reorganisations.