What Is Transfer Pricing?
Transfer pricing is setting the price at which transactions within and between companies take place. The cost set for a transaction is called the transfer price.
Documents Required For Applying:
1. Detailed documentation of the entity and its functions & assets
2. Economic and market analysis, forecasts, budget reports
3. Records related to uncontrollable transactions and pricing methods
4. Once you have the three-tier documents ready, you need to submit them to your area’s tax officer.
1. For failing to furnish chartered accountant report a fine of Rs 1,00,000 is imposed.
2. Not Maintaining Documents can cost you 2% of the value of each transaction.
3. Not Producing Documents attracts a penalty equal to 2% of the specified transaction value.
Is it mandatory?
Yes, as a failure in doing so could cost you heavy fines.
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