Transfer Pricing Advisory

Overview

What is Transfer Pricing?

Transfer Pricing governs the pricing of goods, services, and intangibles traded between related entities. Indian TP regulations (Sections 92A-92F) require that such transactions be at arm's length, supported by comprehensive documentation.

Why It Matters

TP adjustments by the Indian tax authorities can increase taxable income by 10-30% and attract penal interest. With the introduction of BEPS Action 13 (Master File / Local File / CbCR), documentation requirements have become significantly more stringent.

SilverSiX provides end-to-end TP support — from functional analysis and benchmarking to APA applications and dispute resolution.

📊 TP Compliance Snapshot

Threshold: ₹ 10 Cr for documentation (domestic) / ₹ 1 Cr (international)
Methods: CUP, RPM, CP, TNMM, PSM, CPM
Master File: ₹ 500 Cr+ consolidated revenue
CbCR: ₹ 6,500 Cr+ consolidated group revenue
APA: Unilateral, Bilateral, Multilateral
Safe Harbour: Available for IT/ITES, financial transactions

Our Scope

Comprehensive TP Services

📈 TP Study & Benchmarking

Comprehensive functional, risk, and asset analysis with comparable company search and arm's length range determination.

Functional, Risk & Asset (FAR) analysis
Comparable company search (Indian + global)
Arm's length range computation
Multiple year data analysis

📁 Master File & Local File

Preparation of BEPS Action 13 compliant documentation for Indian and global reporting.

Master File (Group-level information)
Local File (Entity-level transactions)
CFS / segment-wise financials
Intangible ownership & DEMPE analysis

🌍 CbCR & BEPS

Country-by-Country Reporting and BEPS Action Plan compliance for MNE groups.

CbCR preparation & XML generation
BEPS Action 8-10 (intangibles, risk, capital)
BEPS Action 13 (documentation)
BEPS Action 6 (treaty abuse)

🤝 APA Applications

Advance Pricing Agreement applications for certainty on future related-party transactions.

Unilateral APA (UAPA)
Bilateral APA (BAPA)
Multilateral APA (MAPA)
Renewal APA applications

💡 Intangible Pricing

Valuation and pricing of intellectual property, royalties, and technology transfers.

Royalty rate benchmarking
Brand valuation
Technology transfer pricing
DEMPE functional analysis

⚖️ Dispute Resolution

Representation before Transfer Pricing Officers and Appellate authorities.

TP scrutiny assessment defence
MAP (Mutual Agreement Procedure)
Secondary adjustment compliance
Safe Harbour election

Execution

Our TP Process

Transaction Identification

We identify all related-party transactions (goods, services, intangibles, financial) and classify them by nature and value.

FAR Analysis

Detailed functional, risk, and asset analysis of each entity to determine the most appropriate TP method.

Benchmarking

Comparable company search using databases (Prowess, Capitaline, Orbis) and application of appropriate filters.

Documentation

Preparation of Accountant's Report (Form 3CEB), Master File, Local File, and CbCR (if applicable).

Advisory & Optimization

Recommendations for TP policy changes, cost allocation, and safe harbour opportunities.

Dispute Support

Representation before TPO, DRP, and ITAT. MAP and APA support where applicable.

Deliverables

What You Receive

Deliverable	Description	Timeline
TP Policy Document	Group-level transfer pricing policy & methodology	Week 2
FAR Analysis	Functional, risk & asset profile of each entity	Week 3
Benchmarking Report	Comparable search, filters & arm's length range	Week 4–6
Form 3CEB	Accountant's report for related-party transactions	October 31
Master File	BEPS Action 13 compliant group documentation	November 30
Local File	Entity-level transaction documentation	November 30
CbCR	Country-by-Country Report (XML + form)	November 30
APA Application	Draft APA submission to CBDT (if elected)	Per engagement

FAQ

Common Questions

What is the penalty for non-maintenance of TP documentation? ▼

Penalty of 2% of the value of each international transaction and specified domestic transaction can be levied under Section 271G for failure to maintain TP documentation.

When is CbCR mandatory in India? ▼

CbCR is mandatory if the consolidated group revenue of the MNE group exceeds ₹ 6,500 Crores (approx. EUR 750M) in the preceding accounting year.

What is Safe Harbour in TP? ▼

Safe Harbour provides predetermined margins for certain categories of taxpayers (e.g., IT/ITES, financial transactions). If elected, the taxpayer is exempt from TP scrutiny for those transactions.

Can I apply for an APA retrospectively? ▼

Yes. Rollback APAs are permitted for up to 4 preceding years (in addition to the 5 prospective years), subject to certain conditions and the tax authority's acceptance.

What is secondary adjustment? ▼

If a TP adjustment is made, the excess / shortfall is treated as a deemed loan/advance. Secondary adjustment provisions require the Indian entity to repatriate / receive the adjustment amount within 90 days.