Transfer Pricing in 2026: Defending Your Transactions
Transfer pricing is one of the most litigated areas of international taxation. In 2026, the tax department is focusing heavily on "Functional Asset and Risk" (FAR) analysis to challenge intercompany pricing.
Best Practices for Compliance:
- Contemporaneous Documentation: Ensure your documents are prepared before the filing deadline, not after receiving a notice.
- Arm�s Length Principle: Regularly benchmark your transaction margins against comparable companies in the industry.
- Penalty Risks: Non-compliance can lead to penalties of 2% of the transaction value.
Properly maintained Transfer Pricing documentation is your first line of defense during scrutiny. We assist clients in preparing robust TP studies that stand up to departmental audits.