Australia has had strict transfer pricing rules for decades, but tighter laws are now in place and the Australian Taxation Office (ATO) has an increasing focus on this area. Australia’s transfer pricing measures aim to stop multinationals from transferring profits out of Australia to related entities in other countries with lower taxing regimes.
At the heart of the transfer pricing regime is the comparable arm’s length requirement test. If a company’s results are found to be substantially different to other non-related companies in the same industry with similar operations, the Tax Commissioner can adjust the company’s taxable income to bring it into line with the comparable arm’s length results.
Does your company satisfy the ‘arm’s length’ test?
It’s challenging for companies to know whether they will satisfy the comparable arm’s length requirement test when they need information about competitors who are not required to publically lodge financial details.
Accru has access to sophisticated databases of reliable financial information covering thousands of companies across different industries and regions to support our clients in this area.
Accru’s transfer pricing documentation
A critical feature of our transfer pricing manual involves providing a rationale for why a particular method of comparison was used and why a company’s pricing meets the arm’s length requirement, as well as providing the information required to satisfy the ATO. Our article Australia’s transfer pricing requirements covers the rules in more detail.
Accru’s Sydney office, Accru Felsers, has been providing assistance in the transfer pricing area for over twenty years and has direct experience with the ATO through transfer pricing reviews and negotiating Advance Pricing Agreements (APAs) with successful outcomes.
Recent world attention on international tax arrangements means it’s now critical for multinationals to have their transfer pricing manuals up-to-date. At Accru, we can assist you to meet transfer pricing obligations and ensure you are in a secure position to refute any claims put forward from an ATO transfer pricing review.