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Valuation, Transfer Pricing & Indirect Tax

Valuation:

Navigating the layers of Customs valuation law to correctly value your imports and legally minimise any duty exposure is a minefield. Get it wrong and you can over, or under, pay import duty or be subjected to sanctions even where the result poses no risk to revenue.

VoxTrade understands how the layers work together and can represent clients where disputes arise, or where certainty and predictability are needed.

Transfer Pricing:

Transfer pricing generally refers to the price of goods provided by one part of any organisation to another. It is typically seen in transactions between firms and their subsidiaries or affiliates in other countries.

A transfer pricing adjustment is an agreement between related companies of multi-national enterprises to retrospectively adjust original prices of goods sold by one related company to another with the purpose of legally maximising profit and minimising taxation liabilities. In essence, a transfer price adjustment is used to manipulate pricing in order to achieve the return on sales required by taxation departments.

The adjustment may result in either an increase or a decrease in the price of the goods depending on market forces, profitability and returns on sales achieved. From a Customs and Border Protection perspective this may mean that the Customs value of the imported goods may need to be adjusted after the importation of the goods, either up or down.

Where the values are adjusted down, a potential reason for duty refund may exist. In the alternative, where values are adjusted up, a need to tender short-paid duties may arise.

In fact, where the goods affected by the adjustment are free from import duty and, as a result, any adjustment will have no impact on government revenue, you do still have a compliance problem given the values declared at the time of import are, in fact, now wrong.

VoxTrade is well versed in assisting Importers in their due diligence processes to ensure their transfer price is acceptable to Customs, and to represent Importers in negotiating the best possible outcome where a retrospective adjustment has been made.

Indirect Tax (GST):

The “simple tax” can be both complex and financially crippling in its operation when international transactions are involved.

How do I mitigate my exposure when my company is not located in Australia?

  • Can I defer my GST?

  • When should I include local supplies in the VoTI?

  • What’s the impact of an over-arching international transport agreement?

Understanding how the layers of tax legislation work, and what the impact will be to your business, is paramount to your business. VoxTrade is able to help you manoeuvre through this process to ensure risks are minimised and compliance is ensured.