Transfer Pricing in India was introduced in 2001 for curbing tax avoidance by laying down norms for computation of income arising from international transactions having regard to the "arm's length price". The Indian Transfer Pricing Regulations (TP Regulations) comprise Sections 92 to 92F of the Income-tax Act, 1961 ("the Act"). The TP Regulations have been primarily modelled on the Transfer Pricing guidelines for Multinational Enterprises issued by the Organisation for Economic Co-operation and Development (OECD).
Key requirements of the TP Regulations
- TP Documentation Requirement: Under Indian Transfer Pricing Regulations maintaining transfer pricing documentation is mandatory where the aggregate value of the international transactions (including reimbursements & cross-charges) of the taxpayer exceeds INR 10,000,000 during the year.
(Specified Domestic Transactions: From Financial Year ("FY") 2012-13 Transfer Pricing compliance also applies to specified domestic transactions (exceeding INR 50,000,000) as per newly inserted section 92BA in the Income-tax Act, 1961 (pending acceptance by the Parliament and Presidential assent)).
- Accountant's Report: Under Indian Transfer Pricing Regulations an Accountant’s Report in Form 3CEB along with Annexure has to be obtained from a Firm of Chartered Accountants and filed with the Assessing Officer.
Stringent penalties
have been prescribed for non-adherence to the TP Regulations.
What it means for multinationals with Indian businesses?
- Indian businesses need to examine their international transactions in the context of the TP Regulations and maintain the required documentation.
- Businesses also need to plan their cross-border transactions in a manner that would be compliant with the TP Regulations.
How can we help you?
As one of the leading advisers to companies like yours, RAMANAND & ASSOCIATES understands the need to approach the transfer pricing norms in a verycustomised manner that provides valuable inputs to the management so as to facilitate their decision making. Our Transfer Pricing professionals provide comprehensive solutions tailored to your business objectives after profiling the exact nature and the extent of the transactions. The process for a year-end compliance or a planning exercise typically includes the following steps:
- Fact-finding exercise, where an analysis is conducted of the functions performed and risks assumed by each entity.
- Selection of the appropriate transfer pricing method(s) and identification of the tested party(ies).
- Comparability analysis - comparable companies are identified using local / global databases, and economic and financial analyses are conducted.
- Documentation/ recommendation- finally, all the above steps are detailed in a report and the required documentation/ recommendation is prepared.
- Arranging issuance of the Accountant's Report in Form 3CEB as required under Indian Income-tax Act, 1961.
Specific Service Offerings in Transfer Pricing
Our specialist team is competent to assist your company in the following areas of Transfer Pricing:
- Documentation studies (including arranging for issuance of Accountant’s Report).
- Global multi-jurisdictional documentation studies.
- Planning studies (margins reviews for budgeting, new transaction planning).
- Supply chain re-structuring.
- Assistance in representation during assessments/appeals.
- Reviewing inter-company agreements from a transfer pricing perspective.
- Structuring cost sharing arrangements for domestic and international inter-company transactions.
- Intangible asset benchmarking.
- Diagnostic reviews.
- Ongoing advisory in respect of Transfer Pricing issues.
- Updating your company on the latest Transfer Pricing trends in TP audits and court rulings.
Distinguisher
- exemplary quality service, responsiveness and depth of experience that is necessary for providing high quality transfer pricing services.
- we take pride in serving our clients at nominal fees.
- Our practical approach to provide transfer pricing solutions identifies beneficial changes to business processes that might result in rationalisation of effective worldwide tax rate and other commercial benefits to your business.
- Our collective experience spans on a pan-India basisacross various industries - IT/ITes, Manufacturing, banking and financial services, etc.
- Access to local and global databases as well as a strong international network of transfer pricing specialists to assist your company / MNE Group across the globe.
Transfer pricing services is provided by KYMR Management and Consultancy Pvt. Ltd.