Transfer pricing

Our Transfer Pricing services offer effective solutions to companies...

..which undertake international transactions with its associated enterprise(s). We assist in corporate decision making at various stages of inter-company transactions i.e., planning, policy making, implementation, compliance and defence.

Overview

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 features of the TP Regulations

• every person who has undertaken an international transaction with an associated enterprise shall maintain information and contemporaneous documentation as prescribed under the Income-tax Rules, 1962 ("the Rules")
• every person who has entered into an international transaction during a previous year shall obtain an Accountant's Report and furnish such report on or before the filing of the income tax return
• 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, Grant Thornton India understands the need to approach the transfer pricing norms in a very customised 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

Our strengths

• 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
• we have been adjudged the “Best Transfer Pricing Team in India” by World Finance Legal Awards 2009, a renowned UK based business magazine
• we have been nominated as one of the best 5 transfer pricing teams in India by the International Tax Review Asia Awards 2009
• we have a dedicated and focussed team of transfer pricing specialists comprising professionals such as CAs, MBAs, an Engineer, analysts etc. with varied skills and backgrounds to advise your company on multi-jurisdictional and complex transfer pricing issues
• in addition, our team has been accredited as the Transfer Pricing Resource Centre by Grant Thornton International
• our collective experience spans different industries with more than 200 clients across industry verticals on a pan-India basis
• we have various local and global databases as well as a strong international network of transfer pricing specialists to assist your company / MNE Group across the globe.