Our transfer pricing specialists are able to identify and address any tax pitfalls and opportunities, with the goal of developing and helping to implement commercial and tax-efficient transfer pricing policies and adapt them as and when new rules emerge or circumstances change.
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.
Key business issues
- Do you trade across borders with related parties?
- Are your cross border dealings with related parties providing you with the best financial outcome?
- Are you unsure of how your international related party prices are set?
How we can help you?
BDO Tax provides transfer pricing services in a number of ways including:
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 tax experts are skilled in analysing prices and in completing comparability studies, in order to determine what the most appropriate arm's length price.
The Tax Office is again focussing on transfer pricing and many businesses are found to have insufficient support for their cross-border prices. Our 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 international 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 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 tax experts who are skilled in negotiating these withthe 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 tax experts assist clients to undertake such reorganisations, review any such reorganisations to ensure that there are no unnecessary tax costs and re-evaluate intragroup prices in light of such reorganisations.