KPMG article: Cost of delivery for “Global Capability Centers” in India
Evolving transfer pricing landscape for GCCs in India
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