Transfer Pricing

Ensuring Compliance for Cross-Border Transactions Within Multinational Groups

Transfer pricing refers to the pricing of goods, services, or intellectual property transferred between related entities within a multinational enterprise (MNE). The Australian Taxation Office (ATO) requires that these internal transactions be conducted as if the parties were unrelated — using what’s known as the arm’s length principle.

If pricing does not reflect market conditions, it may result in artificial profit shifting, leading to compliance risks, audits, and penalties under Australian tax law.

Why Transfer Pricing Matters

Multinational companies operating across borders often face scrutiny over how they allocate income, expenses, and tax liabilities between jurisdictions. The ATO — in line with OECD guidelines — closely monitors transfer pricing arrangements to ensure that Australia receives its fair share of tax.

Failure to comply can result in:

• ATO transfer pricing audits

• Adjusted tax assessments

• Penalties and interest

• Reputational and financial risk

Services Offered by Christopher Garlick

Christopher John Garlick, a senior barrister with a deep understanding of statutory interpretation and international tax frameworks, offers legal support in:

• Advising on the legal obligations under Division 815 of the Income Tax Assessment Act 1997

• Assisting with documentation requirements and compliance strategies

• Representing clients in ATO audits and transfer pricing disputes

• Advising on advance pricing arrangements (APAs)

• Supporting clients with Mutual Agreement Procedures (MAPs) under DTAs

Who Needs Transfer Pricing Advice?

• Australian subsidiaries of overseas parent companies

• Foreign companies with operations in Australia

• Businesses involved in related-party transactions involving IP, loans, services, or goods

• Organisations preparing for ATO review or audit

Key Areas of Risk

• Intra-group loans and financing arrangements

• Use of intangible assets (IP, royalties, branding)

• Shared services between related companies

• Cross-border supply chain structures