International Taxation & Transfer Pricing in Kochi

Transfer pricing rules require transactions between associated enterprises, such as a foreign parent and its Indian subsidiary, to be priced as independent parties would price them (the arm's length price). The rules are now in sections 161 to 173 of the Income-tax Act, 2025.

Every person who has entered into an international transaction or a specified domestic transaction during the year must obtain and file an accountant's report. For FY 2025-26 this is Form 3CEB; from tax year 2026-27 it is Form 48 under section 172.

Form 48 is the accountant's report on international and specified domestic transactions under section 172. It replaces Form 3CEB from tax year 2026-27, is filed online on the e-filing portal, and is due one month before the return due date.

The report is due one month before the due date of the income tax return. With the return due date for transfer pricing cases on 30 November, the report is due by 31 October, unless the CBDT extends the date.

When the aggregate value of international transactions in the year exceeds ₹1 crore. The documentation includes the group structure, functional analysis, method selected and benchmarking, and must be kept for the prescribed period.

The law provides a penalty of 2% of the value of each international transaction for failure to maintain or furnish documentation, and a fixed penalty for failure to furnish the accountant's report. Adjustments to the price can also lead to additional tax and interest.

Most captive IT and ITeS companies use the Transactional Net Margin Method (TNMM), comparing their operating margin on cost with that of independent comparable companies.

A safe harbour is a margin or rate set by the rules that the tax department accepts without a detailed TP audit if the taxpayer opts in. Budget 2026-27 announced a wider safe harbour for IT and IT-enabled services; we check the notified rules before you opt in.

It depends on the nature of the payment and the tax treaty. Royalty and fees for technical services usually carry a domestic rate that a treaty may reduce, while some payments are not taxable in India at all. Tax is deducted under section 393, and the treaty rate needs a tax residency certificate and Form 41.

Under the Income-tax Rules, 2026, Form 10F has been replaced by Form 41. A non-resident claiming treaty benefits must provide a tax residency certificate and Form 41 to the payer.

No. The 2% levy on e-commerce operators was abolished from 1 August 2024 and the 6% levy on online advertising from 1 April 2025. Payments for online advertising to non-residents should now be reviewed under the normal income tax and treaty rules.

A PE is a fixed place of business, dependent agent, service presence or project site through which a foreign company carries on business in another country. If a foreign company has a PE in India, the profits attributable to it are taxable in India.

It can. Many treaties treat services furnished through employees present in the other country for more than a set number of days as a service PE. We review the treaty, the number of days and the contract terms before the deployment.

Yes. We advise on the Indian side and coordinate with our independent associate firms in the UAE and the UK through SGA World International, so treaty positions and documentation agree in both countries.

An APA is an agreement with the CBDT that fixes the transfer pricing method or price for future years, and can also cover past years under rollback. It gives certainty for up to five years and can be unilateral, bilateral or multilateral.