Australia - Transfer pricing policies of multinationals under increased scrutiny 

June 19: The tax morality debate has raised the profile of transfer pricing to a broader audience, with governments and the media putting some companies and their tax structures under public scrutiny.

On releasing an issues paper [PDF 274 KB] on multinational profit shifting in May 2013, the Australian Assistant Treasurer expressed a view against the ability for multinational companies to use aggressive tax practices. However, notwithstanding this increased scrutiny, businesses remain under continuous pressure to restructure their value chain in order to maximize shareholder value and remain competitive.


Given this, senior executives of businesses increasingly need to be confident that their transfer pricing structure is sufficiently robust—both at a technical and practical level.


Among other items, for transfer pricing purposes, it is critical that taxpayers properly align the legal and economic substance of their related-party transactions. This can pose a challenge to companies when changes in their commercial operations are not properly addressed by updated transfer pricing policies and legal agreements.


Businesses may want to consider conducting a transfer pricing “health check” as a review and risk assessment of their current and proposed transfer pricing structure. The initial focus of a “health check” would be on the transfer pricing policies and legal arrangements in relation to significant related-party dealings, complex financing structures, and business restructurings.



For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Australia:


Anthony Seve

+61 2 9335 8728




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this