The term transfer pricing refers to the value attached to the goods or services transferred between parties which are related to each other, the nature of which is mostly cross-border. On a precise note, transfer pricing is the price payable for the transfer of goods, services and technology from one economic unit to the other, wherein such units are situated in different countries but are a part of the same multinational entity. Apart from this, it also refers to the value attached to transfers between unrelated parties which are controlled by a common entity .

Also, any individual who has entered into an international transaction during a previous year is required to obtain an Accountant’s Report and furnish report before filing the income tax return which is 30th November of the financial year.

Listed below are some of the most common transactions which qualify for the provision of transfer pricing:

• Sale of finished goods.

• Procurement of raw materials.

• Procurement of fixed assets.

• Sale or purchase of machinery.

• Sale or purchase of intangibles.

• Reimbursement of expenses already paid or received.

• IT-enabled services.

• Support services.

• Software development services.

• Technical service fees.

• Management fees.

• Royalty fee.

• Corporate Guarantee fee.

• The receipt or payment of a loan.