Transfer pricing (TP) controversies can arise when multinational corporations and tax authorities disagree on the allocation of profits across international borders. TP dispute resolution management advisory services offer assistance to businesses in navigating such controversies and resolving disputes effectively. These services provide expert guidance on dispute resolution strategies and the development of appropriate documentation and defense strategies to support their positions. With the increasing scrutiny of tax authorities on cross-border transactions, TP dispute resolution management is a crucial component of effective tax planning for multinational corporations. These services help businesses mitigate risks and achieve favorable outcomes, ultimately protecting their bottom line and reputation.
Assistance in TP audit support services and in preparing and briefing for proceedings before the Commissioner of Income Tax
-
Assistance in TP audit support services and in preparing and briefing for proceedings before the Commissioner of Income Tax (Appeal) [CIT(A)], Dispute Resolution Panel (DRP) and the Income Tax Appellate Tribunal (ITAT) in relation to TP matters
-
Assistance in determining appropriate strategy with regard to disputes relating to Transfer Pricing, including considering different dispute resolution mechanisms like:
Mutual Agreement Procedures (MAPs)
Safe Harbour (SH) Rules
Advance Pricing Agreements (APAs)
Providing assistance in TP audit support services and in proceedings before the CIT(A), DRP and the ITAT in relation to TP matters
Given the strict guidelines of the Indian TP regulations, companies are commonly subject to audits by TP officers wherein TP enquiries could be rather time-consuming and might involve a substantial commitment of resources for assembling the paperwork, preparing responses and dealing with local tax authorities. KPMG in India’s GTPS team has extensive experience of guiding client in responding to tax authority challenges. Drawing on their experience, our professionals can work with you to help prepare effective responses for submission with the tax authorities, preparing robust economic analyses, assist in fortifying appellate strategies and provide guidance in devising supportable defence at all appellate levels in coordination with the TP litigation specialists.
MAP
A major risk international business transactions face is potential double taxation by multiple tax authorities. Most tax treaties negotiated between countries provide a mechanism to avoid double taxation. Multinationals can file a MAP claim requesting the relevant fiscal authorities to resolve disputes concerning double taxation. The experienced GTPS professionals of KPMG in India can provide assistance in lodging a MAP claim requesting the relevant cross-border revenue authorities to resolve disputes concerning double taxation and assist in preparing the relevant MAP submissions by involving our team of specialists, including senior ex-TP regulators and our GTPS network.
Safe Harbour Rules
The Finance Act, 2009, had introduced Safe Harbour (“SH”) provisions under TP regulations with a view to reduce litigation. The operative Rules were notified in September 2013. SH is defined to mean circumstances in which the income tax authorities shall accept the transfer price declared by the taxpayer subject to fulfilment of certain prescribed conditions. KPMG in India can provide guidance on the eligibility, feasibility and period for which the SH option is to be exercised, assist with the procedural requirements relating thereto, and provide guidance for representations before the respective revenue authorities and provide assistance in complying with the prescribed SH norms.
APAs
An APA is an agreement between the tax authorities and the taxpayer that determines in advance the most appropriate TP methodology or the Arm’s Length Price (“ALP”) for the covered intercompany international transactions. Since its inception in July 2012, it has brought greater certainty in these taxing times by stemming the tide of burgeoning controversies and drawn out TP litigation. The Indian TP regulations provide the option of unilateral/bilateral/multilateral APAs with optional pre-filing consultations.
Rollback provisions have also been introduced in the regulations and taxpayers now have an option to exercise Rollback provisions for up to four financial years preceding the first year covered under the APA.
Our GTPS Team
KPMG in India’s GTPS team comprises:
Our team can provide assistance in planning and making available a robust economic analysis as may be required for the APAs, assist in preparing strong responses to detailed inquiries and provide guidance for discussions with the APA authorities. This could include conducting a feasibility analysis for the APA, assisting with preparing and pre-filing consultation meetings with APA authorities, detailed function, asset risk, economic analyses, providing guidance for preparation and filing of APA application, filing of Rollback application, negotiation with the APA team, finalisation of the APA and preparation of the Annual Compliance Report and also assistance during the Annual Compliance Audit.
