In recent years, transfer pricing has become a crucial aspect of international taxation. Various methods are used to determine the appropriate prices of goods and services in intercompany transactions, but those methods that are based on profits rather than sales have become especially common in practice. This Note compares the transfer pricing methods used by Australia to those used here in the United States. It argues–using Australian jurisprudence as its foundation–that profit-based methods are fundamentally flawed, and as such their use should be minimized. One possible solution may be to repeal the best method rule, which allows excessive use of these methods, and return to the hierarchy of methods that existed prior to the rule’s adoption.