- Transaction Value and Transfer Pricing: The value of imported goods for Australian customs is primarily based on the ‘transaction value’, which includes the actual price paid plus related costs. Importers must ensure that any transfer pricing adjustments made for related party transactions reflect arm’s length principles and are disclosed to avoid penalties.
- Price Related Costs: Importers must account for additional costs not included in the transaction price, such as logistics, manufacturing assistance, and payments like royalties and commissions. Proper analysis of agreements and supply chains is essential to determine which costs must be declared.
- Compliance and Disclosure: The Australian Border Force (ABF) enforces compliance through audits and penalties for non-disclosure of adjustments, starting at AU$14,085 for false statements. Importers can obtain advance rulings and make voluntary disclosures to adjust customs values and mitigate penalties, with proactive disclosure recommended to avoid prosecution during audits.
Source KPMG
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