Foreign multinationals may find that India’s transfer pricing documentation rules are more onerous than in other jurisdictions. KPMG reports that mirror reporting in India is mandatory whereas it is optional in other jurisdictions.

Rajan Sachdev, executive director of transfer pricing at KPMG, says: “Foreign enterprises transacting with it their Indian affiliates may be required to file their Indian tax returns under the source rules. In such cases, Indian transfer pricing rules (ITPRs) cast an obligation on such foreign enterprises to comply with documentation requirements notwithstanding the fact that all underlying transactions may be subject to testing at the other end in the hands of the Indian affiliate. In certain other jurisdictions, such mirror reporting by foreign enterprises may not be mandatory.”

He was commenting for TP Week’s international guide to transfer pricing documentation. This service for TP Week subscribers provides a detailed country-by-country analysis of transfer pricing rules. To date 19 country chapters have been added and throughout February many more jurisdictions will be included to provide a comprehensive and valuable service.

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He added: “ITPRs make it mandatory for taxpayers to maintain contemporaneous documentation for each individual tax year, whereas in certain other jurisdictions the compliance requirements may be less onerous in terms of the frequency with which functional studies and economic analysis is updated.”

KPMG India website