Transfer Pricing & Form 3CEB
Arm's length, documented, by 31 October.
Any Indian entity transacting with an associated enterprise abroad — a parent, a subsidiary, or a commonly controlled company — must price those transactions at arm's length and have the position certified in Form 3CEB by 31 October.
The study benchmarks each transaction against comparable independent ones using one of the prescribed methods. Documentation must be kept for eight years and produced within thirty days of a request.
This is one of the most heavily litigated areas in Indian tax, and the quality of the benchmarking is what decides an adjustment.
What is included
- Associated enterprise and transaction mapping
- Functional, asset and risk analysis
- Benchmarking study with comparables
- Form 3CEB certified and filed
What we need from you
- Group structure and shareholding chart
- Intercompany agreements and invoices
- Segmental financials
- Parent company financial statements
Questions
What is the penalty for not filing Form 3CEB?
₹1,00,000 under section 271BA for failure to furnish the report, plus 2% of the transaction value under section 271AA for failing to maintain or report the documentation, and 2% for not producing it when called for.
Also in Income tax
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