Where an Australian company is part of a multinational group, and either:

  • The Australian business uses intellectual property owned by overseas related parties; or
  • The Australian business owns intellectual property that is exploited/used by members of the multinational group;

the Australian company needs to establish an arm's length royalty rate for the use of the IP. Establishing an arm's length royalty rate for the use/exploitation of intellectual property within a multinational group will enable Australian companies to comply with ATO legislation.