Australia: Proposed changes to transfer pricing guidance for inbound distributors
Proposed changes in Draft Practical Compliance Guideline PCG 2019/1DC
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