30+ years of combined expertise in complex Indian taxation and compliance.
Discuss your unique tax situation with our senior partners. No obligation.
30+ years of combined expertise in complex Indian taxation and compliance.
As cross-border transactions face unprecedented scrutiny, automated benchmarking is no longer sufficient. We structure defensible arm's-length policies and represent clients through complex tribunal litigation.
Ideal for: MNC Subsidiaries, Captive IT Units, and Cross-Border Manufacturing
Transfer pricing adjustments remain a primary source of corporate tax litigation in India. The revenue department employs sophisticated analytics to identify margin deviations, rendering standard global documentation highly vulnerable.
The Revenue department routinely defaults to a NIL valuation for outbound headquarters cross-charges or royalties, asserting that no "commercial benefit" was tangibly received by the Indian entity.
Real Impact Example:
A standard 5% royalty payout to a foreign parent is disallowed entirely → Added back to Indian taxable income → Significant tax demand and initiation of penalty proceedings.
Transfer Pricing Officers (TPOs) frequently reject the comparable datasets of captive IT/ITeS units, introducing high-risk entrepreneurial firms into the analysis.
The result is a demanded markup of 25-30% on operating costs rather than a justified, routine margin of 15%, causing an immediate tax exposure.
Outstanding payments from a foreign parent company to its Indian subsidiary are actively re-characterized by the department as unsecured international loans.
Authorities impute interest income on these balances, often benchmarking against domestic State Bank of India lending rates, artificially inflating Indian taxable income.
Preparation of localized documentation that aligns securely with your global Master File and Country-by-Country Reports (CbCR).
Utilizing domestic databases to extract accurate market comparables. We apply precise adjustments for capacity and working capital differences.
End-to-end management of Unilateral and Bilateral APAs, from feasibility models to direct CBDT negotiations.
Engineering defensible valuation parameters for business restructurings, IP transfers, and cross-border corporate guarantees.
Professional representation before the Dispute Resolution Panel to actively contest and mitigate proposed TPO adjustments at the first-appeal stage.
Specialized legal and economic advocacy before the Income Tax Appellate Tribunal to defend complex pricing models and reverse unjustified demands.
1. Functional Segregation
Successfully documented and segregated routine engineering tasks from high-risk patent development activities.
2. Working Capital Algorithms
Applied rigorous, academically sound adjustments to the TPO's dataset to compress the required median margin.
3. Appellate Victory
Represented the client at ITAT, successfully validating the 14.8% arm's-length calculation and deleting the demand.
"The ₹26 Cr adjustment notice was staggering. Our previous advisors had no answer. Sami's team built a defense that deleted the entire demand at the ITAT level—and more importantly, set up robust functional documentation so this never happens again."
— CFO, US Technology Company Indian Subsidiary
Expert answers regarding Indian documentation compliance and controversy management
The Indian transfer pricing regime is compliance-heavy and routinely scrutinized. Common triggers include:
Sami Tax solution: We legally and economically justify the arm's length nature of each transaction through contemporaneous documentation before the assessment cycle formally begins.
Assessing officers approach intra-group service payments with inherent skepticism. They often assert that the Indian subsidiary received no actual commercial value (applying the "Benefit Test").
The Standard of Proof:
Providing an intercompany agreement is insufficient. Taxpayers must provide granular, empirical evidence that the services were actually rendered and that a third party would have paid for them.
Sami Tax solution: We structure robust defense files that clearly demonstrate the tangible economic benefit commensurate with the payment, securing the deduction.
For complex or high-value transactions, an APA is often the optimal risk-mitigation tool. It provides a mechanism to avoid prolonged litigation by negotiating directly with the CBDT.
Prospective Certainty
Secures a binding pricing methodology for up to 5 future years.
Rollback Provision
Can be applied to resolve ongoing disputes for the prior 4 years.
Combined, an APA can provide up to 9 years of absolute tax certainty and eliminate contingent liabilities from the balance sheet.
Automated database queries often pull in companies with materially different risk profiles. This provides the Transfer Pricing Officer (TPO) an opportunity to reject the comparable set entirely.
The Tailored Approach
Sami Tax deploys analytical scrutiny to ensure the resulting arm's length range accurately and defensively reflects your specific economic reality.
Schedule a consultation. Our economic and legal specialists will review your intercompany transactions and structure a defensible pricing framework before the compliance cycle begins.
Discuss Pricing Strategy