Transfer Pricing Audit

what is the monetary limit for Transfer Pricing Audit for international transaction
Replies (2)
Quick Summary
For international transactions, there is no specific monetary limit that triggers a transfer pricing audit. Instead, Section 92 of the IT Act mandates that all income from such transactions must be computed at arm's length prices. This often necessitates the filing of a 3CEB Report. Audits are now largely risk-based, with parameters like guarantee commission and deemed income changing annually, requiring even small service providers to maintain robust transfer pricing documentation.

For international transaction, no limit is provided by the law. As per section 92 of the IT ACT, any income arising from international transaction shall be computed having regard to the arms lenght price.

Therefore, 3CEB Report i.e. transfer driving audit will be requiere to be filed in your case.

Regards,
Nihit Somani
Currently Transfer Pricing Audit are risk based selection, wherein ITD has set out certain risk parameter for eg : Guarantee commission, deemed IT etc. They parameter changes every year. This will entail small service provider to maintain robust TP Documentation.

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