ISSUE 16 - NOVEMBER 2011KPMG IN INDIA

Transfer Pricing Connect - Bi-monthly newsletter

Dear Readers,

We are happy to present our sixteenth Transfer Pricing (TP) Connect issue.

In India, on the judicial front, since our last edition there have been a few Tribunal decisions which have discussed important TP principles relating to whether corporate guarantee given by the taxpayer on behalf of Associated Enterprises (AEs) are covered within the scope of international transactions or not, arm’s length remuneration for a sourcing support service provider is to be decided on the basis of value of goods sourced through it and not on the basis of a mark up on costs, TP provisions could be applicable to a transaction entered with an unrelated entity which is deemed to be an AE. Further, certain core issues in TP such as selection of comparables, working capital adjustments, availability of standard deduction of +/-5 percent, adjustment to be restricted only to the international transactions with the AE’s, have also been decided in favour of the taxpayer.

In addition, we have highlighted our perspective on Transfer Pricing Issues in Banking sector in India.

On the global front too, there have been many noteworthy TP developments. In Africa, there has been an increase in specific transfer pricing rules / anti-

avoidance legislation introduced by a number of African countries. In Ukraine, new transfer pricing rules were added to its tax laws. In Vietnam the tax authorities have planned to increase tax audits and more TP guidance is anticipated. In Greece, guidance has been issued which clarifies that review of TP documentation is part of ‘tax audit certificate’ program. Further, working drafts of additional or revised chapters of the UN practical manual on TP for developing countries have been released.

We have also attached a link to our recent webinar on the ‘Key Challenges in Recent Transfer Pricing Audits and Controversy Management’, conducted on November 17, 2011, wherein we shared our experiences and provided a KPMG perspective pertaining to the recent round of Transfer Pricing Audits that were completed on October 31, 2011.

We trust that you will find this newsletter useful, and as always, look forward to your valuable feedback.

Regards

Rohan K Phatarphekar

Contents

Indian developments 2

Global developments 7

Webinar 9

Quiz 9

© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Rohan PhatarphekarPartner and HeadGlobal Transfer Pricing ServicesKPMG in India

T: +91 22 3090 2000E: rohankp@kpmg.com

Indian developments

Legal decisions

Hyderabad Income-tax Appellate Tribunal (Tribunal) ruling in the case of Four Soft Ltd v. DCIT (ITA No.1495/HYD/2010)

In the above ruling the Hyderabad Tribunal held that corporate guarantee given by the taxpayer on behalf of AEs is not covered within the scope of international transactions under Section 92B of the Income-tax Act,1961 (the Act). The Tribunal further held that application of TP provisions is to be restricted to the AE business segment of the taxpayer and London Inter Bank Offered Rate (LIBOR) is an appropriate benchmark, to ascertain the Arm’s Length Price (ALP) of a cross border intercompany loan transaction.

The taxpayer rendered Information Technology (IT) and Information Technology enabled Services (ITeS) to its AEs during Assessment Year (AY) 2006-07. In addition to international transactions with its AEs like payment of management allocation expenses, reimbursement of expenses (paid/received), interest received on loan given to AEs, the taxpayer also provided corporate guarantee on behalf of its overseas subsidiary company.

The Transfer Pricing Officer (TPO) re-computed the value of international transactions considering total cost of the taxpayer (including cost incurred towards Non-AE business segment). The taxpayer contended that certain expenses like bad-debts, R&D expenses, etc. are specifically allocable to Non-AE business segment and cannot be considered in AE segment. The taxpayer also contended that exchange fluctuation gain arising in the normal course of business transactions is to be considered in computation of Profit Level Indicators (PLI). The TPO applied corporate bonds interest rate

on loans given by the taxpayer to AEs which the taxpayer had benchmarked using European inter-bank offer rates, i.e. EURIBOR. The TPO applied 3.75 percent as commission rate on corporate guarantee given by the taxpayer on behalf of its AEs.

The Tribunal held that for the TP analysis, only the costs attributable to AE business segment are to be considered and foreign exchange gain/loss arising in the normal course of business activities is to be considered while calculating PLI. The Tribunal distinguished between cross border intercompany loan transaction and a domestic loan and opted for LIBOR as an appropriate benchmark for ALP on the premise that LIBOR is internationally recognised and accepted. The Tribunal ruled that the corporate guarantee given by the taxpayer on behalf of the AE does not fall within the scope of international transaction under Section 92B of the Act. The TP legislation does not stipulate any guidelines in respect to guarantee transactions and no TP adjustment is required. Further, the Tribunal also held that corporate guarantee is incidental to the business of the taxpayer and it cannot be compared to a bank guarantee transaction of a bank or financial institution.

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Delhi Tribunal ruling in the case of Li & Fung (India) Pvt. Ltd. Vs DCIT [ITA No. 5156/Del/2010]

In the above ruling the Delhi Tribunal held that mark up on costs incurred is not an arm’s length remuneration for sourcing support service and the taxpayer should be compensated on the basis of value of the goods sourced through it.

The taxpayer provided sourcing support services to its AE for which it received a remuneration of cost plus 5 percent and applied Transactional Net Margin Method (TNMM) to determine the ALP of such remuneration. The TPO held that taxpayer should receive commission at the rate of 5 percent of the free on board (FOB) value of exports. The DRP upheld the order of the TPO but reduced such commission to 3 percent on FOB value of exports.

The taxpayer contended that it is a limited risk service provider and the remuneration model should be based on functions performed by the taxpayer and the operating costs incurred by it and not on the cost of goods sourced from third party vendors in India. The taxpayer had received nearly 80 percent of the entire consideration received by the AE for rendering sourcing services and the AE had retained only 20 percent of the total consideration.

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those companies were selected by the taxpayer in the preceding year. TPO allowed working capital adjustment, but excluded inventory while computing the same. The TPO considered commission income as non-operating in nature and also rejected the benefit of +/-5 percent claimed by the taxpayer. The DRP, in its order, directed the AO to exclude one of the companies added as comparable by the TPO and accordingly the AO passed the final order.

The Tribunal observed that when the TPO insists on inclusion of a comparable, the onus is on him to demonstrate that the comparability criteria are met. The Tribunal held that once in principle working capital adjustment is allowed, inventory, which is an essential ingredient for working out the adjustment, should not be excluded. The Tribunal further held that since the taxpayer was engaged in rendering warranty services for direct sales on which commission was earned and part of marketing efforts also contributed to commission earning, the commission income on direct sales should not be excluded while computing the operating margins of the taxpayer. The Tribunal, relying on Delhi Tribunal’s decision in the case of ACIT v. UE Trade Corporation India Pvt. Ltd held that the adjustment of 5 percent is to be allowed even in cases where the difference in the value of international transactions and the ALP is more than 5 percent, i.e. it observed that the amendment to Section 92C of the Act with effect from October 2009 is prospective.

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The Tribunal ruled that all the crucial functions are performed by the taxpayer and the taxpayer has developed unique intangibles, human asset intangible and a supply chain management which is very crucial to achieve strategic and pricing advantages. The AE is charging from the third party at 5 percent of the FOB value of the exports from India. Such exports are made possible because of the efforts of the taxpayer. The taxpayer’s contention that it did not enter into any agreements with the third parties did not hold merit since the taxpayer performs all the critical functions to fulfill the conditions of the agreements entered into by the AE with the third parties. Therefore, the taxpayer’s remuneration should also be based on the FOB value of the exports and the compensation received by the AE (i.e. 5 percent of the FOB value of exports) should be distributed between the taxpayer and the AE in the ratio of 80:20.

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Mumbai Tribunal Ruling in the case of Emerson Process Management India Pvt. Ltd. v. ACIT [ITA No. 8118/Mum/2010]

IIn the above ruling, the Mumbai Tribunal ruled in favour of the taxpayer with regard to certain core TP issues such as selection of comparables, working capital adjustments, availability of standard deduction of +/-5 percent, adjustment to be restricted only to the international transactions with the AE’s.

The taxpayer was engaged in the business of providing process management solutions, which help to automate, control and manage complex plant processes and entered into various international transactions with its AEs. During the assessment proceedings, the TPO, recommended adjustment to the international transactions by including three additional companies as comparable on the ground that

Mumbai Tribunal Ruling in the case of Diageo India Private Limited v. ACIT [ITA No 8602/Mum/2010]

In the above ruling, the Mumbai Tribunal held that the contractor of bottling unit of the taxpayer and the overseas group entities are AEs and transaction entered between them are covered by the provisions of the Indian TP regulations.

The taxpayer manufactured and marketed various international brands of alcoholic beverages. The entire manufacturing operation was carried out by Contract Bottling Units (CBU). The business was divided into two segments - Whiskey (manufactured using imported concentrates and flavour) and OTW (i.e. alcoholic beverages other than whiskey, such as rum, vodka etc. which was manufactured using locally procured material). Out of abundant caution, the taxpayer reported the transactions entered into between the CBU and the overseas entities in its Form No. 3CEB.

The taxpayer contended the OTW segment should be considered as comparable of the whisky segment since they operated in the same line of business and no adjustment is warranted due to higher profitability in the whisky segment. The Tribunal rejected the taxpayer’s internal TNMM analysis on the premise that whisky is an established product and OTW products are comparatively at initial stages in the Indian market and there are differences in the level of marketing and overhead expenditure incurred for both the segments.

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Transfer Pricing Issues in the Banking sector – An Indian Perspective

With transfer pricing regulations in India set to complete almost a decade since its introduction, there have been significant developments involving interpretation as well as practical application of the law in various sectors. However, it is often felt that there is still greater need to demystify the complexities surrounding international transactions undertaken in the financial services industry - with passage of time, the nature of cross-border transactions have got increasingly more complex and at the same time, the approach of the tax authorities has become more aggressive which is reflected in the nature of audits undertaken by transfer pricing officers each year. Thus there is a greater need for taxpayers in this sector to facilitate the dissemination of information and build consensus and understanding with the tax authorities in relation to the unique financial transactions that form the crux of several matters that are continuously being subject to litigation before the tax courts in India.

We have elaborated below certain key international transactions in banking and financial services sectors that have been the focus of on-going litigation between tax payers and tax authorities along with recommended documentation which will assist the taxpayers navigate through the audit proceedings:

1. External Commercial Borrowings (ECB) TransactionsECBs refer to the commercial loans in foreign currency denomination which are availed by Indian borrowers from non-resident lenders. Banks in India assist in facilitating the deals between Indian corporate clients in need of ECB and their overseas branches that have the capital to fund the transaction. The Indian branch, based on discussions with its overseas branch, initiates discussions with the client, relying on

The TPO alleged that the taxpayer had incurred substantial advertising expenditure which would result in creation of a marketing intangible. Taxpayer contented that no reference was made to the TPO by the AO for ascertaining ALP in respect of advertising, marketing and promotion expenses.

The Tribunal observed that the CBU was wholly dependent on use of trademarks on which the taxpayer has exclusive right. This relationship meets the test of de facto control on decision making as set out in Section 92A(2)(g) of the Act. Thus Diageo PLC (through the taxpayer as intermediary), indirectly controls CBU and therefore the taxpayer, overseas Diageo Group entities and CBU are AEs. The Tribunal held that reference made by the AO to the TPO under Section 92 CA(3) of the Act, is transaction specific and not enterprise specific. The TPO has no powers to scrutinise transactions which have not been referred to him by the AO. Instructions issued by the Central Board of Direct Taxes (Instruction No. 3 of 2003, dated. 20 May 2003) are binding on all field authorities. The Tribunal deleted the adjustment on account of advertising and marketing spend. Relying on decision in case of UE Trade Corporation India Ltd, the Tribunal allowed the benefit of 5 percent reduction while computing the arm’s length price i.e. it observed that the amendment to Section 92C of the Act with effect from October 2009 is prospective.

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information received from its overseas branch in relation to structuring the transaction and undertakes continual discussions with the client till the exact modalities of the deal are finalised. The Indian branch earns arranger’s fees for providing support and assistance in relation to the ECB deal or in some cases is compensated on a cost plus model basis for its support function. The Indian branch only provides support on the ECB deal and does not assume any funding risk as the risk of capital is solely borne by the overseas lender branch.

The Indian tax authorities allege that the Indian branches play a very active role in negotiation and structuring of the deal through their marketing and commercial expertise in facilitating ECB deals and also perform services relating to credit evaluation and monitoring and claim that higher share of arranger’s fees or higher mark-ups, as the case may be, should be allocated to the Indian branch. The tax authorities also allege that a portion of the interest earned by overseas branch, besides the share of arranger’s fees, should be shared with the Indian branch as part of arm’s length compensation.

It is recommended that detailed documentation be maintained in India evidencing the exact functions, assets and risk (FAR) analysis of the Indian branch along with sample documentary evidence, through copies of ECB deals and email correspondences, to validate the role of the Indian branch.

2. Correspondent Banking ActivitiesThe Correspondent Banking team of Indian branches assists in marketing certain services to its customers which are offered by their overseas network branches (e.g. opening of nostro accounts and availing depository receipt services, letter of credit, escrow services from their overseas branches). This involves explaining the nature of services to the clients, offering marketing brochures and providing quotations to its clients which are received from overseas branches for such services. Considering the low end

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nature of support services provided by the Indian branches, they are generally compensated on a cost plus model basis with a mark-up in the range of 8 to 10 percent of operating costs of the correspondent banking team. In some cases, given the reciprocity of services offered by overseas branches to their customers, which results in promotion of business of Indian branches, no compensation is either received or paid by Indian branches for such transactions.

The tax authorities generally allege a higher mark-up, close to 30 to 40 percent and similar adjustments are also seen in cases where reciprocity of transactions is seen and no payments are either received or paid by Indian branches to their overseas branches.

It is recommended that Indian branches undertake proper FAR analysis for the correspondent activities undertaken by it. Contemporaneous benchmarking analysis can be undertaken to justify the mark-up charged for the correspondent banking services offered by Indian branches. It is also suggested that the details of the direct and indirect cost of offering correspondent banking services be identified and maintained by the Indian branch to support the cost pool on which the mark-ups are applied.

3. Overnight Borrowing/ LendingsBanks generally resort to short-term overnight borrowings in case of shortage of funds and overnight lendings to deploy excess funds with AEs. The rate of overseas borrowings and lendings is usually benchmarked against LIBOR rate available on international databases. Accordingly Comparable Uncontrolled Price (CUP) is considered the most appropriate method for the purpose of benchmarking analysis. The rates of borrowings and lendings have been significantly influenced by the global economic environment. Several instances have been noticed, especially given the credit crisis and

general negative market sentiments surrounding the potential risk of loss of capital in certain parts of the world, the benchmark rates for borrowings have seen a wide variation and there have been instances where the rates of borrowing have fluctuated significantly within a wide range of intra-day low and high rates. This has resulted in the actual rate of borrowings to exceed the benchmark rates which are based on average of rates at different points in the range. In several cases, the variation between the arm’s length price and the value of the international transactions has been seen to be in excess of the 5 percent threshold permitted under law. The taxpayers have accordingly attempted to explain this market reality and the need to adopt the intra-day low and high of the benchmark rates for establishing the arm’s length price.

The tax officers have been proposing TP adjustments in cases where the variation has exceeded the five percent threshold. The amended proviso (2) to section 92C(2) of the Income-tax Act, 1961 since last year has further narrowed the window of permissible variation. The economic reality of wide fluctuation in rates is not accepted by the tax authorities.

It is recommended that tax payers clearly document evidence of actual rates at which transactions are undertaken, source data for benchmark rates, comparability analysis of actual rates with benchmark rates, identification of exceptional transactions – those which fit within the permitted five percent variation and those which exceed the permitted variation. Further, the reasons for high difference between the arm’s length brokerage rate and the rate adopted in the international transaction on account of economic and commercial factors should be adequately documented and established before the tax authorities during the course of audit proceedings.

4. Remuneration for marketing of derivative productsIndian Banks also perform the role of marketing structured derivative products (typically include swap and option transactions) to its Indian clients. The Indian Banks identify the opportunities that exist for offering the derivative products to the client and subsequently liaison with overseas branch. The functions undertaken by the overseas branch relate to structuring of the deal, booking of the deal and hedging the risk relating to the deal. Owing to the specialized nature of the transaction, the compensation for the role of the Indian branch is usually based on an internal TP policy – typically sharing a percentage of the spread earned from the transaction by the overseas branch. In some cases, a cost plus model is followed to compensate the cost of the marketing team involved in marketing of derivatives with an appropriate arm’s length mark-up percentage.

The tax authorities usually attribute a higher share of the spread earned by the overseas branch for the functions undertaken by the Indian branch or applying higher mark-ups for the functions undertaken by the Indian branch. The tax authorities have resorted to seeking information on the deal-wise profit and loss statement for this purpose. In several instances, the tax officers have used secret comparable data applying the internal policy of an MNC bank (which was adopted by the MNC bank for its inter-company transactions) as the arm’s length standard benchmark across the industry resulting in significant adjustments in hands of the taxpayer.

It is recommended that Indian branches undertake proper FAR analysis for the marketing activities undertaken by it – clearly demarcating the FAR analysis of the Indian branch vis-à-vis the overseas branch. Also, it is recommended that copy of the internal policy for sharing of the spread along with the TP study undertaken to support the

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percentage of fees shared with the marketing arm be maintained at the Indian branch. In case of use of TNMM, contemporaneous benchmarking analysis be undertaken to justify the mark-up percentage charged by the Indian branches. It is also suggested that the details of cost of the marketing team be identified and maintained by the Indian branch – so as to support the cost pool on which the mark-ups are applied on the TNMM basis.

5. Head Office cost allocationsSeveral banks have global centres or regional centres for undertaking general and administrative functions at a group level in the areas of legal, human resource, accounting, administration, IT support etc. Banks follow different allocation methodologies for allocating these costs to their various affiliates across the region. Accordingly, these head office cost allocations are also cross-charged by the Head Office to Indian branches of foreign banks. The head office costs may be allocated with or without any mark-up. It is clear that the Income-tax Act, 1961 has placed certain restrictions on the quantum of head office expenditure which can be claimed as deductible expenditure under law. The foreign banks operating in India have been seen to claim deduction for such head office expenditure limited to the quantum of permissible deduction as discussed above generally based on the strength of the a certificate from global auditor certifying the allocation methodology and costs allocated to India. Besides these head office cost allocations, the global centres and regional centres in some instances are also involved in providing certain intra-group services to overseas branches – which are outside the purview of the general head office cost allocations – these are separately charged as beneficial services received by the respective entities, such as Indian branches and are accounted separately from the head office cost allocations. It may be noted that there are no capped

restrictions under law on the quantum of payments that can be made for intra-group services (subject to satisfaction of TP provisions).

The tax authorities have been seen to increase the scrutiny related to such head office cost allocations. In some cases, the Indian branches have been challenged on the need to pay separately for beneficial services – which are in some cases alleged to be part of the general head office cost allocations. Also the tax authorities have asked for increased documentation relating to the head office cost allocations i.e. the details of global costs vis-à-vis workings of costs allocated to Indian branch and evidence of general administrative support received by the Indian branches. As regards cost of services allocated, there is increased focus to satisfy the nature of services received and the benefit test as well as to demonstrate that these cross-charges are for specific business teams or centres and not in the nature of general head office cost allocations.

It is recommended that adequate documentation should be maintained supporting the claim for head office expenditure which should inter-alia include note on expenses considered for head office expenditure, audit

certificate confirming the quantum of head office expenses and proof of quantum of deduction claimed by Indian banks as per the provisions of the local law. As regards intra-group services, standard service level agreements documenting the specific nature of services agreed between the parties should be maintained, details of cost centres and allocation methodology as well note on services availed as well as proof of benefits received should be maintained. Clear demarcation of cost centres considered as head office costs allocated for general and administrative expenditure and cost of intra-group services allocated for specific business line related services should be maintained by the taxpayers.

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Greece - Guidance clarifies that review of transfer pricing documentation is part of “tax audit certificate” program

Recent guidance clarifies that the scope of Greece’s “tax audit certificate” program applies to a taxpayer’s transfer pricing documentation files.

This summer, new procedures established rules for the issuance of “tax audit certificates.” Under this program, one of two certificates may be issued by a company’s certified auditor.

• A tax compliance report “without qualifications” (meaning that the tax authorities are notified, by the certified auditor’s letter, that there were no violations of tax law found)

• A tax compliance report with issues of emphasis, with qualifications, with a negative conclusion, or with an inability to come to a conclusion (meaning that in such instances, a tax audit mandate is issued for specific areas or for a “full scope” tax audit)

Recently, the Greek Ministry of Finance issued guidance providing the procedures for the issuance of an “annual tax certificate.” Under this guidance, the annual tax certificate applies to financial years ending on or after 30 June 2011, and must be issued by a certified auditor by the 10th day following the date on which the annual corporate income tax return is filed. The recent guidance further clarifies that the tax audit certificate regime also includes a review of any intra-group transactions.

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Vietnam - Plans for transfer pricing audits; more transfer pricing guidance is anticipated

A 2011 mid-year report from Vietnam’s General Department of Taxation indicates that the amount of reported revenue loss has been reduced significantly owing to the tax authorities’ audit of 107 foreign-invested companies for the tax years 2008-2010. Following this development, the tax authorities indicated they will instruct the provincial tax offices to audit 870 foreign-invested companies that report consecutive tax losses for the 2008 to 2010 tax years, and to audit 100 percent of tax refund applications by those loss-making companies and companies that achieve less than 2 percent of profit-over-revenue.

In mid-2011, the tax authorities conducted a transfer pricing survey, aimed at obtaining information on the transfer pricing practices adopted by enterprises. The information gathered by the survey is expected to be used in the development of future changes to tax and transfer pricing law and regulations in Vietnam.

The tax reform strategy for 2011-2020, approved by the Prime Minister’s Decision 732/QD-TTg (dated 17 May 2011), includes plans for the introduction of regulations on a number of complex transactions including: business restructuring, asset valuation, thin capitalization, and advance pricing agreements.

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Global developments

Africa - Overview of recent transfer pricing legislation and compliance activities

In combination with the sharp increase in the volume of cross-border transactions, two trends have added to the complex and challenging nature of Africa’s transfer pricing environment.

The first trend is an increase in specific transfer pricing rules or anti-avoidance legislation introduced by a number of African countries. To date, 33 countries in Africa have introduced some form of regulation that allows the tax authorities to adjust the pricing of related-party transactions; and there are signs that even more countries will move towards the introduction of transfer pricing rules. The second trend is increased compliance activities by the tax authorities.

In South Africa, the transfer pricing rules have changed dramatically, with the focus shifting from looking at a specific transaction in isolation to looking at the overall profit objective, economic substance, and commercial objective of an arrangement with a related party.

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Ukraine - New transfer pricing rules

New transfer pricing rules were added to the Ukrainian tax law in December 2010, with an effective date of January 1, 2013. Until 2013, the previous transfer pricing rules continue to apply. However, certain provisions of the new rules have an effective date of April 1, 2011.

Although Ukraine is not a member of the OECD, the new transfer pricing rules are generally based on the OECD Transfer Pricing Guidelines and the arm’s length principle.

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United Nations - Working drafts of additional or revised chapters of the UN Practical Manual on Transfer Pricing for Developing Countries have been released.

The transfer pricing manual is the UN response to a need expressed by developing countries for guidance on policy and administrative aspects of applying transfer pricing analysis to some of the transactions of multinational enterprises. The manual is intended to provide guidance to assist policy makers and administrators in dealing with complex transfer pricing issues, and also to assist taxpayers in their dealings with tax administrations.

The new chapters of the UN manual are:

Working draft on Chapter 1 - An Introduction to Transfer Pricing (click here to know more)

Working draft on Chapter 3 - The General Legal Environment (click here to know more)

Working draft on Chapter 7 - Comparability Analysis (click here to know more)

Working draft on Chapter 9 - Documentation (click here to know more)

Working draft on Chapter 11 - Dispute Settlement (click here to know more)

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TP Quiz

1. The information and documents as specified in Rule 10D have to be maintained for ________years from the end of the relevant assessment year

1. Seven

2. Eight

3. Nine

2. What information is required to be disclosed in an Accountant’s Report?

1. Nature of international transactions

2. Book value and Arm’s length value of international transactions

3. Method adopted for the purpose of benchmarking

4. Documentation to justify arm’s length nature of international transactions

5. All of the above

3. In case of failure to furnish an Accountant’s Report what is the quantum of penalty

1. INR 100,000

2. INR 200,000

For answers to these questions, refer to the next issue

Answers to the previous issue’s TP Quiz

1. Option (2)

2. Option (1)

3. Option (2)

Write to us

Write your feedback/queries/suggestions, etc. at tpconnect@kpmg.com

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

WebinarWe refer to our Webinar on the ‘Key Challenges in Recent Transfer Pricing Audits and Controversy Management’, conducted on November 17, 2011, wherein we shared our experiences and provided a KPMG perspective pertaining to the recent round of Transfer Pricing Audits that were completed on October 31, 2011.

Click here to view the same and obtain useful insights on the TP audit environment in India and potential guidance on the way forward.