While globalization and the continued growth of International Trade, foreign Investments, cross border transactions and regulatory developments has significantly increased the importance of transfer pricing regulations. On the contrary, significant increase in tax disputes and profit shifting has made transfer pricing a focus area for stakeholders.
Transfer pricing happens whenever one party transfer to another related party, goods or services, for a price. In order to tackle the issues that arise in transfer pricing areas the transactions carried out between related companies must comply with the arm’s length principle.
The Transfer Pricing Regulations provides for meaning and computation of the transfer price and suggests detailed documentation requirements to avoid the effect that tends to produce insufficient taxable income or excessive loss on a transaction.
We at ProXcel, offers a multidisciplinary approach to transfer pricing that exploits our strength to provide a customized solutions to the management of company along with providing them solutions to make critical decisions. We also never forget to deliver our services in a best possible manner in accordance with the needs of business owners and requirements of Indian Tax Authorities.
Transfer Pricing Method
There is no specific priority of method in fact this is a matter of discretion that before entering into any international transactions or specified domestic transactions with associated enterprise it is essential that the transaction must be analyzed, evaluated, structured and planned to ascertain the most appropriate of the different methods to be applied in accordance with the regulatory requirements considering the impact of transfer pricing.
We help the business owners/management in effective planning of various transactions with associated enterprises, so as to avoid any transfer pricing disputes.
Documentation –Transfer Pricing
Transfer Price Regulations mandates several annuals and semi -annual documents to be prepared and submitted in relation to transfer pricing to demonstrate the transactions performed with related or unrelated associated enterprise. The transfer pricing documentation must be retained for a period of 5 years after the prescription operated tax. We assist clients in preparing a comprehensive transfer pricing documentation in accordance with prescribed regulatory guidelines.
Accountants Report in Form 3CEB
Transfer Pricing Accountant’s Report in Form 3CEB and the complimentary annual form must be filed with the Income Tax Department within the due date after the income tax return deadline.
The growth or restructuring of a company doing business internationally requires the accountant to certify the arm length nature of related party transactions and confirmation on maintenance of prescribed transfer pricing documentation.
Transfer Pricing Assessments
In certain cases considering the nature and volume of transactions companies may receive show cause notice from income tax department to substantiate arm length nature of international and specified domestic transactions with associated enterprises.
To serve the best to our clients Proxcel team supports by appearing before income tax authorities and present the case with best professional practices.