International TP · Panaji, Goa
Expert international transfer pricing advisory — BEPS compliance, CbCR, bilateral APAs, MAP, intangibles (DEMPE), business restructurings, and MNC group TP policy design by qualified CAs in Goa.
Overview
International transfer pricing governs prices between related parties in different countries. For India-based MNC groups and Indian subsidiaries of foreign multinationals, the regulatory landscape spans Indian TP rules under Chapter X, OECD Transfer Pricing Guidelines, BEPS Action Plans (1, 4, 8-10, 13, 15), bilateral tax treaties, and the Mutual Agreement Procedure (MAP) under Article 25 of India's DTAAs.
The stakes are especially high for intangibles — royalties, management fees, brand licences — where valuations are contested and both jurisdictions may claim taxing rights. Business restructurings that shift profit-generating functions out of India attract exit charge analysis. Country-by-Country Reporting gives revenue authorities a global view of the group's profit distribution. Our DTAA advisory and FEMA compliance services integrate with our international TP practice.
What we cover
From BEPS compliance to bilateral APA — comprehensive international TP advisory for MNC groups.
Talk to our CA →Assessing compliance with OECD BEPS Actions 8-10 (aligning profits with value creation), Action 13 (three-tier documentation), Action 4 (interest deduction limitation), and Action 15 (MLI) — increasingly enforced by Indian revenue authorities.
Analysing the Development, Enhancement, Maintenance, Protection, and Exploitation of intangibles to determine which entity in the MNC group should be entitled to residual returns from intangibles — critical for royalty and IP-related transactions.
Where functions, risks, or intangibles are transferred from India to another jurisdiction in a business restructuring, identifying and valuing the 'exit charge' India should receive — an increasingly contested area of TP.
Preparing and filing APA applications with CBDT for long-term certainty on intercompany pricing — unilateral APAs bind only India; bilateral APAs involve coordination with the treaty partner and eliminate double taxation risk.
Where double taxation arises from TP adjustments in India and a corresponding adjustment is not made in the other country, invoking MAP under the relevant DTAA to negotiate competent authority relief and eliminate economic double taxation.
Preparing Form 3CEAD (CbCR) and Form 3CEAC (CbCR notification) for qualifying Indian entities of large MNC groups — jurisdiction-by-jurisdiction data on revenue, profit, taxes, employees, and assets.
International TP — key BEPS obligations
Master File + Local File + CbCR — India implemented all three from FY 2016-17. Filing deadlines: 31 Oct (3CEB), 30 Nov (Master File), 31 Mar (CbCR).
Intangibles must be priced based on where value is created (DEMPE), not just legal ownership. India's TPOs and ITAT are applying this actively.
Thin capitalisation and interest deduction limits — India's Section 94B limits deduction of excess interest paid to AEs beyond 30% of EBITDA.
Article 25 of India's DTAAs allows taxpayers to invoke MAP where double taxation results from a TP adjustment — CBDT Circular 2017 provides the Indian framework.
Frequently asked questions
Indian transfer pricing rules are broadly aligned with OECD Guidelines — the six ALP methods mirror OECD methods, the arm's length principle is identical, and BEPS Action 13's three-tier documentation was implemented in 2017. Indian courts (ITAT and High Courts) regularly cite OECD Guidelines as persuasive authority, making familiarity with OECD standards essential for Indian TP practitioners.
DEMPE (Development, Enhancement, Maintenance, Protection, Exploitation) is the OECD BEPS framework for attributing intangible-related profits. An entity that merely holds legal title to an intangible but does not perform or control DEMPE functions is not entitled to the full intangible returns — profits should flow to entities that perform and bear the economic risk of DEMPE functions. Indian TPOs are increasingly applying DEMPE analysis to challenge royalty and IP arrangements.
MAP is a treaty mechanism under Article 25 of India's DTAAs that allows competent authorities of two countries to negotiate and eliminate double taxation where a TP adjustment in one country is not correspondingly relieved in the other. MAP is recommended when: a significant TP adjustment is upheld; the other jurisdiction will not grant corresponding relief automatically; and a bilateral APA is not practical. India has an active MAP programme and has resolved many cases with the US, UK, and Japan.
CbCR (Form 3CEAD) requires an Indian parent of a qualifying MNC group to report for each jurisdiction: revenue (related and unrelated party), profit/loss before tax, income tax paid and accrued, stated capital, accumulated earnings, number of employees, and tangible assets. This data allows revenue authorities to identify jurisdictions where profit appears disproportionate to economic activity — triggering further TP scrutiny.
Section 94B limits the deduction of interest paid to an associated enterprise: the excess interest (i.e., interest expense to AEs exceeding 30% of EBITDA or interest income, whichever is higher) is disallowed. This applies to Indian companies with total interest expense to AEs exceeding ₹1 crore. Disallowed interest can be carried forward for 8 years. The provision implements BEPS Action 4 and applies alongside the TP arm's length requirement on the interest rate.
A Unilateral APA is agreed between the Indian taxpayer and the CBDT — it fixes the TP method and ALP for Indian tax purposes for up to 5 years (plus 4-year rollback). A Bilateral APA involves coordination between CBDT and the competent authority of the other country through MAP, resulting in an agreement that binds both jurisdictions — eliminating double taxation risk. Bilateral APAs take longer to negotiate (typically 3-5 years) but provide full certainty. They are recommended for high-value, recurring transactions with significant double-tax exposure.
Related services
International TP risk spans two or more jurisdictions simultaneously. Our qualified CAs in Panaji, Goa combine Indian TP expertise with OECD BEPS knowledge to build a globally defensible TP position.