International Transfer Pricing
Transfer pricing policies of every multinational business play in important role in the taxation of distributable profits across geographies. When a business operates in several countries, it is legally bound to be just and fair for by offering the right share of global profits to tax. After all, every country has a legal right to tax a share of the global profits. This principle has been reiterated across several international treaties and conventions. The recent Base Erosion and Profit Shifting (‘BEPS’) Action Plans issued by the Organisation for Economic Co-operation and Development (‘OECD’) have resulted in global acceptance.
Our service offerings
- Transfer Pricing Advisory and transaction structuring
- Transfer Pricing Risk assessment
- Benchmarking studies
- Transfer pricing studies
- Transfer pricing compliances
- Transfer pricing planning (Safe Harbour and Advanced Pricing Agreements)
- Transfer pricing litigation and representation
- Transfer pricing controversy resolution and appeals
Transfer Pricing Advisory and transaction structuring
We are adept at developing solutions and advising clientele in resolving complex transfer pricing transactions and valuations. Our team is equipped to undertake a detailed analysis of the transaction and its impact surrounding associated laws and regulations. Our advisory and recommendations are backed by intense research, value addition, quality and alignment to business goals. Our specialities in transfer pricing advisory include industry analysis, competitor analysis, revenue recognition criteria, billing and payment methodology, costing and internal comparable methodology approach, alignment to global transfer pricing principles, margin analysis etc.
Transaction structuring involves conducting an in-depth analysis and nitty-gritties of several aspects. We assist clientele in evaluating and structuring transactions in alignment with the transfer pricing methodologies. Transaction structuring involves analysis from the perspective of the global tax rates, nature of transaction, treatment and taxability of the transaction under domestic and foreign tax laws, drafting and maintenance of appropriate documentation, post transaction structuring compliances etc.
At VJM, Transfer pricing advisory and transaction structuring is amongst our niche business offerings to clientele and we have been able to engage with several domestic and international clientele and derive value out of the business needs.
Transfer Pricing Risk assessment
Transfer pricing risk assessment involves assessment of the existing transactions and business structures and providing a summary of the potential risks associated with the existing model, short comings in the existing model and implementation measures to overcome the deficiencies thus identified. This process involves critically analysing and providing recommendations from an independent market risk standpoint.
With the presence of skilled and experienced professionals at VJM, we have associated with several clientele in undertaking risk assessment and identify possible areas of non-compliances and risks involved.
Benchmarking studies are undertaken prior to the commencement of the transaction in order to understand and evaluate the arm’s length margins for the purpose of transfer pricing compliances and conducting transactions. Benchmarking studies provide guidance and practical insights into the potential pros and cons surrounding a particular transaction.
Benchmarking studies prepared and supported by sound technical positions and available jurisprudence helps clientele to assess potential risks involved and mitigate the possibility of any tax controversies and contingencies.
Transfer pricing studies
Transfer pricing compliances
Transfer pricing compliances consist of information gathering, analysis and periodical reporting of various facts and circumstances to the tax authorities in accordance with the provisions of the Indian tax laws. In addition, certain compliances may also be necessitated pursuant to requirements arising out of foreign transfer pricing laws.
At VJM, we have devised compliance programs that facilitate smooth flow of end to end process involved in transfer pricing compliances.
Transfer pricing planning
The global transfer pricing atmosphere has moved from a controversy borne legislation to a planned and certainty-oriented arena. With the advent of BEPS and several other initiatives taken by the OECD, there has been increased awareness, acceptance and commitment demonstrated by governments in making an attempt to resolve potential transfer pricing controversies. The introduction of Safe Harbour (‘SH’) and Advanced Pricing Agreements (‘APA’) have brought in path-breaking changes in the transfer pricing arena.
The APA and SH involve intense processes pertaining to application preparation, documentation, discussions with the tax authorities and post agreement compliances. The eligibility is determined basis the nature of transaction and the industry to which the business pertains to.
We work closely in association with leading expert tax and legal professionals from our network firms who are specialised in the field and closely co-ordinate the entire process. This association is aimed at bringing subject specific expertise for the benefit of the clientele and in line with our commitment to deliver exceptional client service.
Transfer pricing litigation and representation
Transfer pricing litigation and representation
Transfer pricing has been an evolving aspect of the Indian tax laws and several developments over the period have come to surface. As the transfer pricing laws in Indi mature and more nuances are noticed, there is an increase in the transfer pricing litigation.
We have a specialised team of legal and tax experts being certified professionals from the industry and help in representation of clientele before the tax authorities. The team is extensively involved in assisting clientele data collation, data analysis and discussions with the tax authorities. With our unique combination of hand picked talent, we have been able to successfully defend several clientele before the lower level tax authorities without any further tax demands.
Transfer pricing controversy resolution and appeals
TP controversy resolution involves complex matters and matters pending for adjudication at the appellate stages. Resolution of any outstanding transfer pricing controversy is essential in order to mitigate the continued effect of a controversial issue underlying an ongoing tax litigation. The quantum of amount locked in litigation would be humungous and may lead to continuation of litigation.
We have a specialised team of legal and tax experts being certified professionals from the industry and help in representation of clientele before the appellate authorities. With our unique combination of hand picked talent, we have been able to successfully defend several outstanding transfer pricing controversies at the appellate levels.