KPMG article: Cost of delivery for “Global Capability Centers” in India

Evolving transfer pricing landscape for GCCs in India

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May 29, 2025

As multinational companies continue to establish “Global Capability Centers” (GCCs) in India, they encounter a complex landscape of transfer pricing challenges. While the cost-plus billing model remains prevalent, recent scrutiny from Indian tax authorities has shifted focus from the traditional debate over arm’s length mark-ups to the adequacy of the operating expense cost base itself.

This shift has led to significant transfer pricing adjustments, affecting various components such as free-of-cost assets, management fees, pass-through costs, subcontracting expenses, share-based compensation, foreign exchange losses, and adjustments under Indian Accounting Standards (IndAs).

Read a KPMG article* prepared by KPMG tax professionals that explores the evolving transfer pricing landscape for GCCs in India.

* Reproduced with permission from Tax Management International Journal, 5/28/2025. Copyright @ 2025 by Bloomberg Industry Group, Inc. (800-372-1033) http://www.bloombergindustry.com

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