India: New guidelines for transfer pricing referrals

India: New guidelines for transfer pricing referrals

The Central Board of Direct Taxes (CBDT) issued new guidelines concerning the criteria for selecting cases for specialised transfer pricing scrutiny, clarifying the role of Assessing Officers and Transfer Pricing Officers, and providing guidance for maintenance of the tax authorities’ database of transfer pricing case referrals.

Related content

Under Instruction no. 3/2016, referrals to Transfer Pricing Officers will be mandatory when the case is identified for scrutiny on the basis of transfer pricing risk parameters (computer-assisted or manual selection). Cases that are not identified under these criteria nevertheless can be referred to the Transfer Pricing Officers when:

  • The taxpayers have not filed an accountant’s report or failed to disclose an international transaction or “specified” domestic transaction.
  • There is a transfer pricing adjustment of INR 10 crore or more for an earlier year, and the adjustment was upheld by judicial authorities or is pending an appeal.
  • There is a search and seizure or survey operation, and transfer pricing findings have been recorded.

There are rules for when transfer pricing referrals are to be made in other situations. The new guidelines also set forth the role of the Transfer Pricing Officer, the role of Assessing Officers after the determination of the arm’s length price, and other rules.

 

Read a March 2016 report [PDF 284 KB] prepared by the KPMG member firm in India: CBDT replaces guidelines for selection and referral of transfer pricing cases for assessment

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform