Dear all, hopefully i can get some help. We are an American company that has subsidiary companies in China, Australia, Newzeland and Middle East. We have a couple of seniors executive officers working in Australia and Newzeland and they are involved in “managing” the China operation. Therefore we want to allocate some of their expenses (mainly salary and international travel) to China company. Considering the difficulty of justifying the amount of charge (about AUD 650,000 a year) from a transfer price perspective, i’m thinking that China company paying all these international cross charges from Australia and New Zealand to the parent company in America ( at the moment China company pays a Trade Mark fee to America company). Since both Australia and New Zealand companies need to pay corporate charge to parent company in America, let the parent company can less charge them accordingly. Does this approach works? Could there be any compliance issue from Australia or New Zeland sides? Many thanks!
