Countries all over the world are applying greater scrutiny – and calling for stricter regulations – on transfer pricing practices. However, this greater scrutiny can provide an opportunity to identify more cost effective arrangements for your international transactions.
In Australia, a new transfer pricing self-assessment regime is placing greater burden on the Public Officer to sign the income tax return to confirm that the related party pricing is arm’s length and is supported by good quality transfer pricing documentation. Failure to have adequate transfer pricing documentation can result in higher tax penalties in the event of an Australian Tax Office (ATO) audit.
At a global level, there has been a rapid introduction of new transfer pricing regulations from the Organisation for Economic Cooperation and Development (OECD), particularly on intellectual property as part of their Base Erosion and Profit Shifting Initiative (BEPS). This will have a substantial impact on current and future transfer pricing structures for all sizes of business.
BDO Australia’s Transfer Pricing Practice helps groups navigate this fast changing transfer pricing environment. Aided by dedicated transfer pricing practitioners around the BDO network, we provide a range of planning, compliance, audit defence and benchmarking services. We can work with you to develop transfer pricing policies that are defensible, flexible and in line with your overall tax planning strategies.
Our Transfer Pricing team can help you with:
- Preparing transfer pricing documents in accordance with the new Australian self-assessment regime. This addresses the ATO’s five key questions on transfer pricing and allows the taxpayer to achieve a reasonably arguable position (RAP) in respect of filing their income tax return to minimise potential tax penalties.
- Assisting with the preparation and review of International Dealing Schedule (IDS) disclosures.
- Working holistically to understand the future strategy of your business and to design an optimal transfer pricing structure based on their value chain and the location of key operational personnel/assets/risks in the business. Substance is key to this work given the Australian reconstruction rules and the new regulations from the OECD on intellectual property.
- Assisting to respond to an ATO risk review/audit including strategy advice, drafting letters and meeting with the ATO.
- Obtaining an Advance Pricing Agreement (APA) where clients would like certainty on transfer pricing matters. This can be unilateral (just with the ATO), or bilateral (with the ATO and a foreign jurisdiction).
- Helping groups with A$1 billion to prepare to comply with new BEPS rules applying to accounting periods commencing after 1 January 2016. We can help clients consider upfront the impact of BEPS on internal transfer pricing risks and how these may be addressed. We can also assist with BEPS compliance in preparing a country by country report, master file and Australian local file.