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What are the documents required to be maintained by a company while executing an international transaction in business?

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Kumar Kumar
Answered on February 13,2020

Transfer pricing documentation requirements are provided under Section 92D of the Act and Rule 10D of the Income-tax Rules, 1962 (Rules).

The categories of documentation required are:

  • Ownership structure
  • Profile of the multinational group
  • Business description
  • Nature and terms (including prices) of international transactions
  • Description of functions performed, risks assumed and assets employed
  • Record of any financial estimates
  • Record of uncontrolled transaction with third parties and a comparability evaluation
  • Description of methods considered
  • Reasons for rejection of alternative methods
  • Details of transfer pricing adjustments
  • Any other information or data relating to the associated enterprise that may be relevant for determining the arm’s-length price

A list of additional optional documents is provided in Rule 10D(3).

In addition, the taxpayer is required to obtain and furnish an Accountant’s Certificate (Form 3CEB) regarding maintenance of documentation. This has to be filed irrespective of the transaction value.

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