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Transfer pricing in brief

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Ritik Chopra

student

7648 Points Posted on 05 May 2021

Can someone explain transfer pricing in brief?

Replies (2)

Quick Summary

Transfer pricing is an accounting method where one company division charges another for goods or services, often based on market rates. For international or specified domestic transactions with associated enterprises, the price must be at an arm's length value. Key compliance includes furnishing an Accountant's Report (Form 3CEB), a TP Study Report, and Master File compliance by the deadline.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 05 May 2021

Transfer pricing is an accounting practice that represents the price that one division in a company charges another division for goods or services provided. A transfer price is based on market prices in charging another division, subsidiary, or holding company for services rendered.

Mr. Bhandari

74 Points Posted on 21 May 2021

Transfer Pricing states that any international transaction / specified domestic transaction entered by an assessee with its Associated enterprise (akin to related party) is required to be determined at arm's length price (akin to fair value). The statutory compliance are Furnishing of Accountant's report (Form 3CEB), TP Study Report and Master File Compliance to be undertaken before 31 October (Extended to 30 November 2021 for FY 2020-21). You can reach out on cabhandaritaxservices @ gmail.com for further clarification/ assistance.