India: Transfer pricing guidance, case selection and multiple-year range

India: Transfer pricing guidance, case selection

The Central Board of Direct Taxes (CBDT) issued guidance items relating to transfer pricing cases.

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  • Instruction No. 15/2015 (16 October 2015) replaces guidance from 2003 for Assessing Officers and Transfer Pricing Officers regarding the administration of transfer pricing assessments. The new guidelines generally apply with respect to international transactions.  The guidelines further specify that cases selected for transfer pricing assessment are not to be selected for scrutiny based on the value of international transactions reported by the taxpayer, but are to be selected based on risk parameters. Read an October 2015 report [PDF 300 KB] prepared by the KPMG member firm in India: CBDT revises and updates guidance for selection and referral of transfer pricing cases for assessments
  • The CBDT on 19 October 2015 published final rules for the use of range and multiple year data that provide clarifications on various areas as well as bring into play, areas that may result into disputes. The new guidance finalizes draft rules released in May 2015, for computing the arm’s length price of international transactions or “specified domestic transactions” undertaken on or after 1 April 2014. As proposed, the rules related to the availability of range and use of multiple-year versus single-year data. Read an October 2015 report [PDF 440 KB] prepared by the KPMG member firm in India: CBDT rolls-out the final rules for ‘range’ concept and multiple year data prescribed under transfer pricing regulations

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