Transfer pricing is commonly considered as the single largest tax issue across the world. Transfer pricing issues also rank high on the BEPS agenda items.
Going forward, owing to the continuous exchange of transfer pricing information worldwide, mainly through the exchange of Country-by-Country Reporting data, and the OECD and G20’s focus on transparency and substance, transfer pricing policies and practices of MNCs really need to be robust, as well as consistent globally. Worldwide, with new businesses and business models emerging faster than ever, newer transfer pricing complexities also continue to emerge.
Over the years, Indian transfer pricing legislation and the OECD’s transfer pricing guidance have been aligned to a great extent. India has the distinction of having the largest number of publicly available transfer pricing rulings in the worldwide, including some of the most high profile transfer pricing disputes – both in terms of the quantum involved as well as the complexity of issues involved. India also continues to have stringent penalties for non-compliance with transfer pricing regulations.
We provide a host of transfer pricing services to clients, including:
- Transfer Pricing Policy Formulation
- Global Documentation Assistance
- Representation and Litigation
- Dispute Resolution and Certainty
- Outsourcing Solutions
- Due Diligence
A robust transfer pricing policy is formulated after a careful understanding of the industry dynamics, the business of the group, study of the complete value chain of the business, and the functional characterisation of the group entities involved in the value chain. While formulating a transfer pricing policy, one also needs to take into account the outlook of the tax authorities in different jurisdictions, APA experiences, etc. The policy also needs to be aligned with the overall commercial objectives of the group as a whole.
Majority countries around the world have incorporated the three-tiered transfer pricing documentation norms in their domestic legislation, though with their respective nuances. This basic consistency in the rules relating to transfer pricing documentation enables MNCs to prepare a substantial part of their transfer pricing documentation centrally, and only the specific requirements of the local laws of different countries need to be then incorporated in the respective local files.
We provide services relating to global transfer pricing documentation, including:
– Preparing and updating Master File
– Assistance in compiling, and analysing Country-by-Country Reporting (CbCR) data; highlighting red flags and areas of concern / remediation
– Preparing Local Files for various jurisdictions, including India
– Specific event based documentation, such as, justification of losses, royalty or management fee payments, business restructurings, Cost Contribution Arrangements (CCAs) etc.
– Documentation supporting functional characterisation of group entities
We have assisted clients from diverse industry sectors in representing their cases involving complex issues before transfer pricing authorities across different levels.
Our approach to representation is extremely fact-specific, with immense focus on explaining the business rationale to the authorities, duly supported by legal arguments and case law. We have a high success ratio with the transfer pricing authorities.
In case required, we also support clients with their litigation matters.
We advise clients with respect to Dispute Resolution options available under the Indian transfer pricing rules. We represent our clients before the Dispute Resolution Panel (DRP). We advise clients with respect to eligibility, implications and compliances with respect to safe harbours.
The Advance Pricing Agreements (APA) program of India has been very successful so far. We guide clients with respect to the suitability of their case for unilateral, bilateral or multilateral APAs. We also advise clients on Mutual Agreement Procedures (MAPs) in case of transfer pricing disputes.
Clients which outsource in-house transfer pricing activities or processes to India benefit from the deep pool of highly skilled specialised transfer pricing professionals.
Depending on the requirements of the clients, we provide competent transfer pricing professionals on assignment basis, or for specific periods of time.
If you are a transfer pricing practitioner in any part of the world, outsourcing of specific activities or processes to us helps you scale up or scale down with ease, gives you access to highly skilled transfer pricing professionals, without having to commit costs of in-house resources.
For businesses proposing to enter into M&A / restructuring transactions, it is common to undergo a tax due diligence. It is important to bear in mind that transfer pricing due diligence is increasingly becoming very critical in the overall scheme of things. Especially for start-ups, a transfer pricing due diligence becomes very critical since it might impact the valuations significantly.
We help businesses with buyer and vendor due diligences and help them assess the associated tax risks, costs and remediation.