The Australian Taxation Office has warned companies it will be focusing on money attributed to offshore marketing hubs and will use its stronger transfer pricing powers to go after them.

Australian companies sent more than $100 billion to related parties in the low-tax nation of Singapore and another $15.6 billion to "hubs" in Switzerland in 2013, where they pay little or no tax.

Singapore is the top choice for multinationals fond of profit shifting. Credit:Leung Cho Pan

In a note to large business taxpayers released on Wednesday, the ATO said in some cases "the amount charged by the marketing hub to the Australian company is not what arm's length – or independent – parties would pay".

"In particular, we are concerned that the economic substance of these arrangements may be materially different to the associated legal form," it said.