| • |
Each person or association
who has involved in an international transaction
should maintain an up-to-date record of each
transaction as prescribed by the legislation. |
| • |
All income
acquired by the company by means of any international
transaction shall be calculated at arm’s
length price. There are various methods to calculate
the arm’s length price, depending on the
nature and type of the transaction, the nature
of the group or the association involved, or
any other features of the transactions involved.
These methods are introduced by the Central
Board of Direct Taxes, generally known as the
‘Board’. Some of them include the
resale price method, cost plus method, comparable
uncontrolled price method, and transactional
net margin method. |
| • |
If there
are two or more appropriate prices assumed for
a certain transaction, the arm’s length
price will be calculated as the average of the
prices. |
| • |
At the end
of a financial year, the person or group involved
in an international transaction should submit
the report of it in Form 3CEB under the guidance
of a Chartered Accountant. This form has to
be filed before he files the Income Tax return
of the same period. |
The group or person who does not adhere
to these rules is liable to pay the penalties as imposed
by the Board.
Transfer Pricing
Regulation for Indian Companies
All Indian companies are required to analyze their international
transaction with respect to the Transfer Pricing Regulation
and adhere to it by maintaining proper transaction records
and documents.
How can NBC
help you?
NBC acts as the advisor to your company, especially
in matters concerning the effective operation of your
business in India. We can help you in countering the
new Transfer Pricing Regulation in a cost-effective
manner, without consuming much of your time. We provide
you the appropriate solution after studying your business
objectives and the nature of transactions that have
been carried out.
The following step-by-step procedures explain our modus
operandi.
| • |
A
fact-finding exercise is carried out in order
to analyze the various functions performed by
the organization and the possible risks that can
be encountered by each activity. |
| • |
Select
the appropriate method of transfer pricing and
identify the parties who have been tested with
the particular method. |
| • |
Conduct
a survey based on the database available from
various national and international sources in
order to identify the companies that can be benchmarked
for the selected company and perform a financial
analysis on the basis of them. |
| • |
Prepare
a consolidated report on the basis of the analysis
and document it appropriately. |
| • |
Issue the
report in Form 3CEB
as mandated by the Indian Income Tax Act, 1961. |
NBC is also specialized in defending
the transfer pricing policy of various companies in front of
the policy officers and thus counter them in an efficient
manner.
Should you know how to carry out the
business activities adhering to the transfer pricing
policy or should you have any query on other related
procedures, you may contact
Request
a quote
|
