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    Tax & Transfer Pricing

    Cross-border tax is what your Indian and US companies owe in each country, and transfer pricing is the price they charge each other.

    The markup isn’t a negotiation between you and yourself. (read where we wrote it)

    Mainly for

    ₹1 croreA year in dealings abroad before India asks for full price records

    Where does a transfer price come apart?

    Rarely on the first invoice. Usually when the two countries' files tell different stories, or when the India team's role grows and the price stays the same.

    The bigger the circle, the more of the tax risk sits at that stop.

    1. The agreement

      What the Indian company does for the parent, and the markup it is paid. Tax offices read it against the work you do.

      The agreement, clause by clause

    2. The price

      A markup matched to what independent companies earn for similar work, from one study used in both countries.

      Pricing the India team's work

    3. The monthly invoices

      Billed at an estimated markup, with GST zero-rated under a letter of undertaking renewed each year.

    4. The true-up

      The year-end correction to the agreed markup. It needs a GST debit or credit note, and the money must arrive in time.

    5. India's report

      Form 3CEB by 31 October, listing every dealing with the parent. Reimbursements, ESOP recharges and loans are the ones often missed.

      Form 3CEB

    6. The US return

      Form 5471 with the parent's return, its related-party schedule matching India's figures for the months that overlap.

      Form 5471

    Read what our tax lead has written on the corridor

    From CA Mallavarjalla Mounika, Lead - Due Diligence & Assurance

    If India’s report supports a 17% markup and the US documentation defends 8%, one of them is wrong, and both tax authorities can see the numbers. The fix is one benchmarking approach, one functional analysis and one intercompany agreement, used in both countries.

    The captive model assumes routine work under US direction. That’s changing: many India centres now own products, make decisions and create valuable intellectual property.

    Revisit the model whenever the India team’s role changes, not only when the documentation is due.

    CA Mallavarjalla Mounika, Lead - Due Diligence & Assurance

    The services fee is rarely what gets missed. The smaller flows around it are.

    CA Mallavarjalla Mounika, in Form 3CEB: the transfer pricing report your Indian subsidiary files every year

    How is tax handled across two countries?

    One price both tax offices accept, each country's report, the year-end true-up, and withholding and US state tax kept in step.

    How we work

    Where next in Tax & Transfer Pricing?

    Tax & Transfer Pricing pages

    • How we workOne price, held in both countries

      We set the markup from one price study and write it into the agreement. Then we file India's report and the US return on it, and plan the year-end true-up before it happens.

    • InsightsInsights on US–India tax

      Our tax lead writes about where the two countries' files disagree, and the smaller flows that go unreported.