The Classic Partners LLP
International Transfer Pricing
Cross-border transactions with group companies — goods, services, royalties, financing, and guarantees — sit at the heart of Indian TP law. We design and defend international transfer pricing for inbound and outbound groups.
Structure Your Cross-Border PricingWhat Counts as an International Transaction?
Under Section 92B, an international transaction is one between two or more associated enterprises, at least one of which is a non-resident — purchase or sale of goods, provision of services, use or transfer of intangibles, lending and borrowing, guarantees, cost-sharing, and business restructuring. Even a transaction with an unrelated party can be deemed international where a prior agreement with an AE shapes its terms. The full legal frame is on our TP laws page and the firm's transfer pricing overview.
High-Risk Cross-Border Transaction Types
- Intra-group services: management fees and shared services demand benefit evidence — agreements, deliverables, and cost-allocation keys.
- Royalties and intangibles: rate benchmarking and DEMPE-style substance analysis for IP payments.
- Financing: intercompany loans, interest on delayed receivables, and corporate guarantees — persistent TPO favourites.
- Contract R&D and captives: cost-plus models for IT/ITeS and engineering centres, with safe harbour options.
- Business restructuring: exit charges and post-restructure profit allocation.
Certainty and Relief Mechanisms
- Safe Harbour Rules: prescribed margins for eligible sectors that the department accepts without question.
- Advance Pricing Agreements: unilateral or bilateral certainty for up to five future years with rollback of four prior years.
- Multi-year ALP option: one year's determined ALP applied to two following years for similar transactions.
- MAP: treaty relief against double taxation from foreign or Indian adjustments via the DTAA, within our international tax services.
Our International TP Services
Policy Design
Pricing models for inbound subsidiaries and outbound Indian groups.
Compliance Suite
Study, documentation, and Form 3CEB each year.
Specialist Benchmarks
Royalty, loan, and guarantee benchmarking.
APA & Safe Harbour
Eligibility analysis, applications, and negotiation.
Controversy Defence
Assessment, DRP, and appeals.
Group Alignment
Indian positions consistent with Master File and global policy.
Frequently Asked Questions
What is international transfer pricing?
The pricing of transactions between associated enterprises where at least one party is a non-resident — covering goods, services, intangibles, financing, and guarantees — which Indian law requires to be at arm's length under Sections 92 to 92F.
Are corporate guarantees to foreign subsidiaries covered by TP?
Yes. Guarantees are treated as international transactions and TPOs routinely impute a guarantee fee; benchmarking the commission rate and documenting commercial rationale is essential.
What are safe harbour rules?
Government-prescribed margins or prices for specified sectors and transactions which, if declared and met, the tax authorities accept without transfer pricing scrutiny.
What is an Advance Pricing Agreement (APA)?
An agreement with the CBDT fixing the ALP or method for covered transactions for up to five future years, with optional rollback to four earlier years; bilateral APAs additionally bind the treaty partner, eliminating double taxation.
How are delayed receivables from AEs treated?
Outstanding receivables beyond agreed credit periods are commonly treated as deemed loans, with notional interest imputed; working-capital-adjusted benchmarking and contractual credit terms are the standard defences.
Pricing transactions across borders?
Design it right, document it once, defend it everywhere — talk to our international TP team.
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