TP ISSUES FOR ROYALTY TRANSACTION
In the attached article we have presented our analysis on royalty payment, which is a highly litigated transaction in the transfer pricing landscape in India. The broad aspects covered in the article are the common issues faced during the assessment proceedings, recommendations on approach for defending royalty and the changing landscape for the transaction in recent times.
Considering the high quantum of adjustments made by the tax authorities, it is essential to be proactive and have robust defence for substantiating the payment of royalty.
How we can support
- Support in maintenance of cost benefit analysis documentation to substantiate royalty payment
- Performance of CUT search using Global Royalty database to identify comparable license agreements and determine the arm’s length royalty range
- Audit Defense before all forums – Transfer Pricing officer, Dispute Resolution Panel, Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal
- Analysis of DEMPE functions
- Assistance in APA proceedings