Countries all over the world are applying greater scrutiny - and calling for stricter regulations - on transfer pricing practices. This can provide an opportunity to identify more cost effective arrangements for your international transactions.
In Australia, the transfer pricing self-assessment regime places 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, the 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), have a substantial impact on transfer pricing structures for all sizes of business.