In Transfer Pricing, Section 92B defines An international Transaction as follows:

“International Transaction” means a transaction between two or more associated enterprises, either or both of whom are non-residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money, or any other transaction having a bearing on the profits, income, losses or assets of such enterprises, and shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises.”
As such any transaction between two or more associated companies situated in different countries in terms of a property that is tangible or intangible, a service offered by the company, or any form of lending of money, etc. It is compulsory that at least one of the participants involved in the transaction is a non-resident of India. However, a transaction that has been carried out by two non-resident Indians, where one of them possesses a permanent setup in India and whose income is taxable from India, such a type of transaction is also considered as ‘International Transaction.’

(i) the expression “international transaction” shall include:

• Purchase of raw-material;
• Sale of finished goods;
• Software Development services;
• I T Enabled services;
• Support services;
• Technical Service fees;
• Royalty fee ;
• Management fees;
• Corporate Guarantee fees;
• Loan received or paid;
• Purchase of fixed assets;
• Reimbursement of expenses paid /received;
• Sale or purchase of machinery etc…
• Transactions of Intangible Assets and Properties such as Patent, Royalty, Goodwill etc.

We offers clients based on the inputs given, most qualitative and intelligent online Transfer Pricing Documentation work. Further, tax advise and consulting on fixation of Arm’s Length Price and adoption of most appropriate method will also be suggested. This documentation requirements and inputs are different Case to Case depending upon the complexities and issues involved into the same however, based on the Transfer Pricing Laws and Concepts.
We will provide similar functional comparable from the public data bases both locally and globally, after comparing the FAR Analysis (FAR: functional, Assets and Risk Analysis), basing on economic and market conditions. This TP study includes the contemporaneous data analysis and research from the public data bases also, while analyzing the correct and similar functional comparables.

Generally, Transfer Pricing Rules triggers when two or more Associated Enterprises (AEs) companies enter into a commercial contract during an international transaction in order to allocate a particular cost incurred in relation with a Sales, Service or Facility presented by any one or all of the companies, then such a cost/pricing shall be calculated taking into account the arm’s length price of the particular assistance, service, or facility, as applicable.

For Transfer Pricing following documents have to be maintained when a company is involved in an international transaction.

• The details of the ownership of the person with respect to the company. These include the ownership structure, the details of the shares, and information on ownerships held by any other company on it.
• A detailed profile of the foreign group to which the assessed company is associated with for the international transactions. The details such as name, address, country where tax returns are filed, and the legal status, etc., have to be furnished about the multinational group.
• A detailed description of the business activities of both the assessed person and the associated group of companies with whom the former has been involved in international transaction.
• The details of the international transaction, such as the nature of the transaction, details of the property or services transferred, the terms contained in the transaction, and the amount and value of each transaction.
• The details of the functions carried out by such a transaction, the details of the risks involved and the value of the assets used or to be used by the assessed or the associated company that is involved in such a transaction.
• The details of the records collected for the entire business or a particular division of the business during the period of the company’s business activity in which the foreign transaction has been involved. These include reports such as the estimates made on various market trends, forecasts about the market, budget analysis or any other such finance-related reports prepared by the company.
• The details of the uncontrolled transactions, if any, that has taken place with a third party during the period of the international transaction. The nature and the terms and conditions of such transaction have to be mentioned as they play an important role in deciding the value of the international transaction.
• The details of the analysis conducted in order to assess the impact of the uncontrolled transaction on the international transaction concerned.
• The details of the various methods considered and the most appropriate method adopted in deciding the arm’s length price with respect to an international transaction. The details should also include the details on why the particular method was adopted and how it was implemented successfully in order to decide the arm’s length price and why other methods are rejected / not suitable to the entity, have to be observed.