Transfer Pricing & International Tax

Transfer pricing refers to the rules requiring that cross-border dealings between related entities, such as a parent and its subsidiary, are priced on an arm’s length basis, as if between independent parties. The rules exist to ensure profit is not shifted out of Australia through artificial pricing of intra-group dealings.

If you have cross-border dealings with related entities, then yes. Common signals include charging management fees or recharges between entities, running an offshore support or back-office team, selling to or buying from related overseas entities, or owning intellectual property offshore. It applies to businesses of all sizes, though the ATO offers simplified record-keeping options for eligible smaller and lower-risk taxpayers.

You need documentation that demonstrates your related-party dealings are priced at arm’s length, prepared contemporaneously, which provides protection against penalties if your position is reviewed. The ATO offers simplified record-keeping options for eligible smaller or lower-risk taxpayers, while large multinational groups have additional requirements, including a Master File, a Local File, and Country-by-Country reporting.

The ATO pays particular attention to related-party financing, such as the pricing of intra-group loans, and to the treatment of intangibles like intellectual property, alongside arrangements such as marketing and procurement hubs. We help you manage that risk with a well-supported position.

Transfer pricing is one part of your cross-border tax position, sitting alongside double tax agreements, withholding tax, residency, and structuring. As we put it, tax compliance files the return, and transfer pricing makes it credible. We handle both together, so your pricing and your wider international tax position are coherent.