In the wake of globalization, most MNC’s (Multi National Companies) today generate large portions of their taxable income, from other than their home jurisdictions. Thus making transfer pricing an increasingly important issue among tax directors, boards of directors and government fiscal authorities worldwide.

The explosive growth in world trade in recent years, and the resulting increase in cross - border transactions between related parties, has catapulted transfer pricing to the forefront of important international tax issues. MNC’s of all sizes are finding their transfer pricing practices under increased scrutiny by tax authorities.

Extensive Transfer pricing regulations for India have been proposed according to which an arm’s length standard is the frame of reference. This implies a valuation of transfer pricing transactions based on selling prices set by unrelated (or independent) parties transacting in similar selling environments.

Fiscal authorities are policing multinational’s transfer pricing policies ever more aggressively in attempt to protect their tax base from erosion. The Income tax Act, 1961 now has specific regulations relating to transfer pricing. The risk of exposure to double taxation and possible interest and penalties propel clients to adopt a pro-active approach.

The appropriate transfer pricing strategy balances opportunity and risk management, weighing effective tax - rate optimizations against fiscal-authority challenges and the costs of compliance.

Transfer Pricing has become the most difficult area of international taxation. We advise multinational companies on the most appropriate Transfer Pricing Policy to be followed.

Our approach is marked by innovation and the resulting policy is one that is the most practical. We enable you to develop an integrated transfer pricing strategy, tax planning, economic analysis, accounting, statistical methods and database development to ensure the highest level of expertise in formulating and then implementing effective transfer pricing strategies.

It focuses on prices charged for related – party transactions, including inter – company transfer of tangible goods, intangible property services, loans and leases. It affects nearly every aspect of multinational operations - R&D manufacturing, marketing and distribution, after-sale services, and of course, an organization’s worldwide tax burden.