Transfer pricing for foreign-owned Indian subsidiaries.
Every payment between your Indian subsidiary and your foreign parent must follow India's transfer pricing rules. We help you design, document, and defend your pricing — cleanly and correctly, from intercompany agreements to Master File and CbCR compliance.
Transfer pricing documentation is mandatory every year for every foreign-owned Indian subsidiary — regardless of size or revenue. It requires an intercompany agreement, a benchmarking study against Indian comparables, and an annual Form 3CEB filing. Incorrect pricing or missing documentation can trigger scrutiny, penalties, and delays in cross-border payments.
Cost-plus, TNMM, or pass-through — which fits your model?
The right method depends on what your India entity actually does — research, development, shared services, or a straight cost pass-through. Here's how the common approaches differ.
| Method | Best suited for | How it works |
|---|---|---|
| Cost-plus | SaaS, engineering, and product development centres | India entity's costs are marked up by a benchmarked percentage before intercompany billing |
| TNMM | Shared services, back-office, and support functions | Net profit margin is benchmarked against comparable Indian companies performing similar functions |
| Fixed mark-up | Predictable, low-risk service arrangements | A pre-agreed percentage is applied consistently, simplifying annual documentation |
| Pass-through | Reimbursements with no value addition | Costs are recharged at actuals — requires careful documentation to avoid being treated as a service fee |
| Allocation keys | Multi-entity cost-sharing arrangements | Shared costs are split across group entities using a defensible allocation basis (headcount, revenue, usage) |
End-to-end transfer pricing support.
From the first intercompany agreement to annual Master File compliance — one team handles it all.
Intercompany agreement drafting
Service agreements, cost allocation agreements, software development agreements, IT support agreements, and management fee agreements — each aligned to TP rules and Indian tax expectations.
Benchmarking study
A detailed analysis using Indian comparable companies, functional analysis, transaction analysis, and FAR (Functions, Assets, Risks) analysis to support your pricing position during audit.
TP documentation — 3CEB & local file
Form 3CEB, local file, intercompany transaction details, pricing rationales, and supporting schedules — submitted before statutory deadlines.
Master File & CbCR compliance
Where applicable — Master File Part A and Part B, CbCR notifications, and documentation support for your group's global reporting team.
Transfer pricing planning
Guidance on cost-plus models, salary recharge models, cost allocation, margin justification, and reimbursement structures — designed for SaaS, engineering, CRO, and IT back-office models.
Intercompany mark-up advisory
Determining the correct mark-up for R&D, engineering, IT development, global support, data operations, and finance shared services — aligned with India TP expectations.
A seven-step process, simple and defensible.
Understanding your intercompany model
We map who provides what, where value is created, what risks each entity bears, and how costs and revenue flow across the group.
Designing the pricing approach
Depending on your business, we recommend cost-plus, TNMM, fixed mark-up, pass-through, or allocation keys.
Drafting or updating agreements
We prepare compliant intercompany agreements aligned to tax expectations on both sides of the border.
Benchmarking & comparables
We identify suitable Indian comparables and justify the margin your pricing model reflects.
Preparing 3CEB & documentation
Accountant's report (Form 3CEB), local file documentation, and transaction-level TP support.
Master File / CbCR (if applicable)
We file and maintain the Master File, CbCR notifications, and alignment with your global group's reporting.
Ongoing advisory
Support for new service models, group invoicing, reimbursement design, and quarterly review as your business evolves.
Transfer pricing needs practical clarity, not generic theory.
We link TP directly with GST, TDS, and FEMA implications — because for foreign-owned subsidiaries, these disciplines never operate in isolation.
A simple checklist to get started.
Common questions about transfer pricing.
Is TP documentation mandatory every year?
+Do startups or small subsidiaries need TP?
+How much markup should we apply?
+What happens if we don't file Form 3CEB on time?
+Do reimbursements need transfer pricing documentation?
+Ready to get your transfer pricing in order?
Schedule a no-obligation discovery call. We'll review your intercompany model and outline a clear compliance plan.
Schedule a consultation Write to rohit@krprassociates.com