Tax authorities the world over are today scrutinising transfer pricing policies of multinational companies to ensure that crossborder transactions are appropriately taxed within their jurisdictions. However with most companies engaged in crossborder businesses and transfer pricing policies differing across nations, compliance has become a major issue.
SKP’s multi-disciplinary team- of finance, tax and legal experts- works cohesively to provide clients with international business assistance with their transfer pricing policies; so as to safeguard the client’s business interests while being able to defend their transfer prices with the tax authorities if and when challenged.
Recent trends in transfer pricing assessments in India
Our holistic services include assistance with
- Designing Transfer Pricing Policy
Transfer price or the price set for transfer of goods (products, services, funds, etc.) within an organisation often determines the amount of profit revealed by an organisation, which in turn will determine the taxes payable to the local authorities. Needless to say the transfer price opted for by a company has a direct bearing upon its account books.
However several companies, in an attempt to achieve greater profits, find themselves susceptible to heavy damages when their transfer pricing policies come under the scrutiny of tax authorities.
SKP’s international tax team is equipped with the necessary knowledge and experience to help clients arrive at optimum pricing. Thus enabling companies to achieve sustained growth, while maintaining compliance on account of transfer pricing. In formulating and implementing the optimal transfer pricing strategy our consultants also consider withholding tax, international tax, exchange control aspects and tax relief exemptions.
- Review of existing policy
SKP consultants also analyse existing transfer pricing policies for potential risks from a qualitative and quantitative perspective. Following the existing policy review, we develop solutions to mitigate any potential risk to the client.
- Documentation for Transfer Pricing
Any taxpayer entering into a business transaction with an overseas associate, the aggregate value of which exceeds INR 10 million annually, is required to maintain transfer pricing documentation on a real-time basis to support claims that the transfer price has been determined on an arm’s length basis.
SKP’s transfer pricing consultants help clients put together the exhaustive documentation required, together with the mandatory industry analysis, to support the validity of the transfer pricing policy implemented. Besides we help clients maintain these documents on a contemporaneous basis as is required by the Indian transfer pricing regulations mandate.
- Certification for Transfer Pricing
Besides maintaining the necessary documentation on a contemporaneous basis SKP’s transfer pricing consultants help in obtaining the essential transfer pricing certification i.e. Form 3CEB which needs to be filed with the Return of Income Under the Indian Transfer Pricing Regulations.
- Representation for Transfer Pricing
SKP’s transfer pricing consultants are well experienced and abreast with the latest rulings of the tax authorities, making them competent enough to defend the transfer pricing strategies implemented by the client company before the tax authorities.
- Assistance in Advanced Pricing Arrangements
Advance pricing arrangements or APAs refer to agreements between companies and the tax authorities on the future application of the arm's-length principle. With decisions made on an amicable basis, regarding the quantum of tax and regulations with regard to transfer pricing, litigation costs related to associated risks may be entirely avoided.
SKP’s talented team of tax and transfer pricing experts provide assistance at various stages of the Advance Pricing Arrangements. From holding pre-filing meetings with the tax authorities, advising on the appropriate methodologies in arriving at the correct transfer price, preparing the documentation essential for the APA, and negotiating with the tax authorities, right to the point of implementation of the APA and preparing the documentation for the annual tax report.
Transfer Pricing Study Process Flow Chart
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