Emerging Issues in Transfer Pricing 

My name is Anthony Seve. I'm the National Lead Partner for KPMG in Australia for Transfer Pricing.

Risks and opportunities

I think some exciting things that are happening are really driven by commercial imperatives. In particular, we're seeing a lot of restructuring activity. Some of that restructuring is being driven by some of the imperatives around collecting or being able to position for some of the immense growth that is happening in our region, but also there are threats for our clients. So they need to position against new competition coming from aggressive markets such as China.

Focus

Some of the things that we're seeing currently are a focus on where risk has been taken in a jurisdiction that leads to low profits or losses. Most tax jurisdictions are particularly sensitive to that. The ATO in particular are looking at more complex transactions around debt restructures. They are looking at transactions involving supply chain restructures as well. Those are very clear focuses for the ATO but also for some of the other sophisticated revenue authorities in the region.

ATO concerns

The ATO understands these commercial imperatives but naturally they are concerned to make sure that these restructures are done in such a way that they don't disadvantage the Australian revenue. So it's very, very important when you do these restructures that you have a strategy in order to make sure that you're positioned well to manage some of the ATO challenges that might come down the line.

The future

The future for transfer pricing, I think that as international trade continues to grow the proportion of transactions that will occur within company groups between related parties will also continue to grow and there will be a need to manage that from the perspective of ensuring that revenue authorities around the region as they become more sophisticated are comfortable with the transfer pricing profile of organizations.