The transfer pricing landscape in Australia has already seen several significant updates in 2025, with the Australian Taxation Office (ATO) refining compliance approaches and transparency requirements. While none of these changes are entirely new, they underscore the pace at which the rules are evolving – and why it’s important for you to stay informed.
1. ATO Draft Guidance on Inbound Cross-Border Financing – PCG 2025/D2
The ATO has issued draft guidance that aligns compliance expectations for inbound related party financing with the recently introduced thin capitalisation rules.
The framework categorises arrangements into four risk zones:
- White – already reviewed and concluded
- Green – low risk
- Blue – compliance risk not assessed
- Red – high risk
When finalised, this will apply to income years from 1 July 2023, covering both new and existing financing arrangements.
2. Country-by-Country (CbC) Reporting – Exemptions Narrowed
From 1 January 2024, fast-track exemptions and administrative relief for preparing the Australian local file are no longer available.
The only remaining exemptions are where:
- The Australian Significant Global Entity (SGE) has no foreign operations or transactions.
- Group global income is more than AUD$1 billion, but under the CbC threshold in the foreign parent’s jurisdiction.
- The entity leaves its group mid-year to join a non-SGE group.
You’ll now need to email a formal exemption request to the ATO to rely on any of these scenarios.
3. Public Disclosure of CbC Reporting Data
Starting with reporting periods from 1 July 2024, Australia will publish CbC information. This includes new disclosures such as your approach to tax and explanations for any gap between income tax accrued and tax paid.
As of 12 June 2025, affected entities can register using the ATO’s Public CbC Registration Form. The shift to public transparency means that transfer pricing policies will now be subject to broader stakeholder review – not just regulatory scrutiny.
4. Low-Risk Software Payments – PCG 2025/D4
The ATO’s latest draft guidance clarifies when it won’t review cross-border software payments to determine if there are royalties subject to withholding tax.
Two low-risk categories apply:
- White zone – no further self-assessment required.
- Green zone – minimal ATO review, limited to verifying self-assessment.
If your arrangements fall outside these zones, you’ll need robust transfer pricing documentation to justify arm’s length terms.
Why this matters for you
While these developments aren’t brand new, they collectively mark a shift towards:
- Greater transparency – with more public reporting obligations.
- Sharper compliance frameworks – especially for financing and software arrangements.
- Narrower exemptions – making proactive compliance planning more important.
If you operate across multiple jurisdictions, now’s the time to review your transfer pricing documentation, financing terms, and internal processes for CbC reporting. The changes in 2025 show that the ATO is continuing to refine its expectations, and you’ll want to be ahead of the curve rather than catching up.
How can Moore Australia help
At Moore Australia, we work closely with multinational businesses to navigate evolving transfer pricing requirements with confidence. Our team can help you assess your current risk zones, strengthen documentation, and prepare for public reporting obligations.
With access to global expertise and a deep understanding of local regulations, we’ll guide you through the complexities so you can focus on running your business while staying compliant.
