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Australia: Proposed changes to transfer pricing guidance for inbound distributors

Proposed changes in Draft Practical Compliance Guideline PCG 2019/1DC 

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December 12, 2025

The Australian Taxation Office (ATO) released its proposed changes to its transfer pricing guidance for inbound distributors.

Key changes in Draft Practical Compliance Guideline PCG 2019/1DC, which outlines the ATO’s compliance approach to “inbound” Australian distributors, include:

  • Reduction of earnings before interest and tax (EBIT) margins for certain industry sectors
  • Definition of inbound distributors of digital products or services
  • Tightening of advanced pricing arrangement (APA) references
  • ATO’s view on value creating activities
  • Addition of the white zone

The ATO has requested comments on the proposed updates by February 13, 2026.

Read a December 2025 report prepared by the KPMG member firm in Australia

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