ATO published Practical Compliance Guideline PCG 2017/1 that addresses transfer pricing issues related to centralized operating models involving procurement, marketing, sales and distribution functions.
The type of activities that are commonly centralized include marketing, sales and distribution functions although centralized operating models are not necessarily limited to these functions. These centralized operating models are referred to as 'hubs' and are defined as multi-faceted arrangements.
The framework set out in the Guideline can be used to:
The Guideline provides a self-assessment risk framework that allows companies to assess their transfer pricing outcomes using the ATO's risk framework. Companies may be asked to inform ATO whether they have self-assessed their rating and if so, what the risk rating is.
Sources: ATO - TP Guidelines
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