Global Daily Tax News, Australia Updates TP Guidance On Inbound Distribution Arrangements, (Dec 15, 2025)

The Australian Taxation Office has issued a draft update to Practical Compliance Guideline 2019/1 – Transfer pricing issues related to inbound distribution arrangements.

The ATO said the updated PCG includes updated profit marker guidance, specifically for the Life Science and Information and Communication Technology industries, reflecting current benchmarking to assess transfer pricing risk for inbound distribution arrangements.

The updates also clarify the scope of the application of the PCG and Reportable tax position (RTP) reporting by introducing a white zone for certain taxpayers. The white zone category will apply to certain taxpayers – for example, those with a signed advance pricing arrangement (APA) or a recent high assurance rating.

The update to the PCG also contains a definition of inbound distributors in relation to tangible goods and digital products, and clarifies the scope of what will not be risk assessed under the PCG by explicitly excluding certain arrangements from the application of the PCG.

The ATO is seeking feedback on the draft update by February 13, 2026.