Interim Budget 2024 Key Highlights: read more

Insights

Direct Tax Alert

Are You Ready for These Important Transfer Pricing Filing Deadlines?

November 03, 2022

Deadlines for the filing of important Transfer Pricing-related documents are fast approaching. If you have cross-border transactions within group companies, you must be prepared for these deadlines!

What is Transfer Pricing?

Transfer pricing is the setting up of the price for the transfer of goods or services (tangible or intangible) from one group entity to another group entity (i.e., between two associated enterprises).

Transfer pricing is a framework for pricing intercompany transactions at arms’ length. It is a mechanism to prevent the shifting of profits by manipulating prices.

Its provisions apply to (a) Tangible Goods - raw materials, components, spare parts, semi-finished/ finished goods, traded goods, assets, etc.; (b) Intangible Goods - trademarks, trade names, patents, etc.; and (c) Services – Information Technology / IT-enabled, management, marketing support, engineering, After Sales services, etc.

Such cross-border intra-group transactions, which are a norm today, need strict compliance as they are under the watchful radar of anti-price manipulation and anti-tax evasion authorities around the world.

TP DOCUMENTS, REPORTING AND FILING DUE DATES, DEADLINES, AND PENALTIES

The following is the related documentation along with filing deadlines and penalties for non-filing

  1. TP Documentation and Benchmarking

Benchmarking of transactions of an entity with its associated enterprises (AEs), with up-to-date documentation containing all information along with a TP Study Report containing a corporate overview, industry analysis, description of AE transactions, Functions Assets & Risk (FAR) analysis, economic analysis, and the benchmarking process.

  • FILING: TP Documentation [Section 92D(1)]
  • DEADLINE: NA
  • PENALTY:  2% of the value of each international transaction [Section 271AA(1)] for failure to furnish the TP Study report
  1. Master File Form (Master Filing Compliance)

The Master File Form involves reporting under the guidelines of Base Erosion and Profit Shifting (BEPS) in accordance with the provisions of sub-section (4) of section 92D of the Income-tax Act, 1961 read with the Income Tax Rules, 1962.

An Indian entity must file information for a particular financial year as regards its international group in Form 3CEAA on or before the due date of filing of return of income in India.

  • FILING : Form 3CEAA [Section 92D(4)] - Master Filing Compliance
  • DEADLINE: 30 November 2022
  • PENALTY INR 5,00,000  [Section 271AA(2)] for non-filing
  1. Country-by-Country Reporting (CbCR) Intimation

The CbCR reporting and filing of intimation are mandatory in case the consolidated group revenue of the International Group exceeds INR 6,400 Crores (equivalent to Euro 750 million) in the accounting year preceding the reportable accounting year.

The amount of consolidated group revenue has to be checked from the consolidated financial statements prepared by the parent entity of an international group.

Filing of CbCR Intimation by an Indian entity in Form 3CEAC for a particular financial year is to be done two months prior to the date of filing of the CbCR Report by the parent entity as required under section 286 of the Income-tax Act, 1961.

  • FILING – BY INDIAN ENTITY : Intimation in Form 3CEAC [Section 286(1) and Rule 10DB(2)]
  • DEADLINE: Two months prior to the date of filing of the CbCR report by the parent entity  
  • FILING – BY PARENT ENTITY: Filing in Form 3CEAD [Section 286(2) and Rule 10DB(3)]
  • DEADLINE: Within 12 months from the end of the Financial Year, i.e.,31 March 2023
  • PENALTYINR 5,000 per day  for a filing delay of up to one month and INR 15,000 per day for failure to file beyond one month delay  [Section 271GB(1)]

Ensure Smooth and Timely Filing – and Peace of Mind! - with MBG Corporate Services

Transfer Pricing compliance is a complex, time-consuming, and continuous process in general overall. Specifically, these fast-approaching deadlines need the experienced hands of experts to ensure they are done smoothly and on time.

At MBG Corporate Services, our vast experience with Transfer Pricing means that our experts ensure timely and accurate filing for your business.

Contact us:- +91 88601-90008

Email us:- [email protected]

To know more go here:- Transfer Pricing, Master Filing & CbCR Compliances Timelines & Penalties


What can we help you achieve?

Stay one step ahead in a rapidly changing world and build a sustainable future with us.

Get a quote
Open chat
Hello ?
Can we help you?