Transfer Pricing Issues
In today’s globalised economy, transactions between related entities across borders are both common and scrutinised. With tax authorities worldwide intensifying audits on cross-border dealings, Transfer Pricing (TP) has become one of the most critical aspects of international tax compliance.
At Shift by MLegal, we offer strategic, legally compliant, and defensible transfer pricing solutions for multinational enterprises, startups, family offices, and digital businesses. We help you design pricing models that align with your global operations — while mitigating tax risk and ensuring compliance with OECD and domestic guidelines.
What is Transfer Pricing?
Transfer Pricing refers to the pricing of goods, services, or intangible assets transferred between related parties across international borders. The key principle is that these transactions must be priced as if they were between unrelated parties in an open market — known as the Arm’s Length Principle (ALP).
Failure to follow ALP can lead to:
- Reassessment of income by tax authorities
- Double taxation
- Penalties and interest
- Loss of reputation and litigation risk
Common Transfer Pricing Transactions
| Transaction Type |
Examples |
| Tangible Goods |
Sale of raw materials, components, or finished goods between group entities |
| Intangible Assets |
Licensing of trademarks, patents, technology, and software |
| Financial Transactions |
Intra-group loans, guarantees, cash pooling |
| Cost Sharing Arrangements |
Shared R&D, marketing, or overhead cost allocations |
Our Transfer Pricing Services
| Service Area |
What We Deliver |
| Transfer Pricing Planning |
Design of pricing models compliant with global and domestic TP laws |
| TP Documentation |
Master File, Local File, and Country-by-Country Report (CbCR) preparation |
| Benchmarking Studies |
ALP validation using databases and financial analysis |
| Intercompany Agreement Drafting |
Legally defensible documentation for intra-group transactions |
| Audit Defence & Litigation |
Representing clients before tax authorities and in appellate forums |
| APA and MAP Support |
Advance Pricing Agreements and Mutual Agreement Procedures with tax offices |
Jurisdictions We Cover
- India: Income Tax Act Sections 92–92F, Rules 10A–10E
- UAE: OECD-aligned ESR and TP rules under Corporate Tax Law (2023)
- UK: HMRC guidance based on OECD BEPS framework
- USA: IRC Section 482 & 6662(e), APA frameworks
- OECD and non-OECD countries through global treaty alignment
Transfer Pricing Compliance Framework
| Requirement |
Applicability |
| Master File |
Group-wide documentation for companies in multiple countries |
| Local File |
Country-specific details and analysis for local entities |
| CbCR |
Reporting global income, taxes paid, and economic activity |
| Form 3CEB (India) |
Mandatory disclosure of specified domestic and international transactions |
| TP Disclosure Rules (UAE 2024) |
New requirements for connected persons and related parties |
Risk Scenarios We Help Mitigate
- Underpricing of goods/services resulting in profit shifting
- Intra-group loans with below-market interest rates
- Royalty arrangements without valuation support
- Shared service arrangements lacking cost allocation methodology
- Lack of updated or region-specific documentation
Sample Engagements
| Client Type |
Scenario |
Outcome Secured |
| Indian Exporter ↔ UK Co |
Intra-group product sale |
Benchmarked margin range to avoid TP adjustment |
| UAE Family Office |
IP licensing to EU JV |
Royalty rate aligned with OECD IP guidelines |
| SaaS Startup |
India ↔ Singapore service arrangement |
Cost-plus model documented and approved through APA route |
| PE-backed Tech Firm |
TP litigation with Indian tax office |
Resolved via MAP with treaty country tax authority |
The Shift by MLegal Advantage
- In-house legal + tax + economic analysis expertise
- Real-time benchmarking with global databases
- Multi-country compliance with BEPS, OECD, and local rules
- Robust documentation to withstand scrutiny
- Trusted advisor to businesses across industries: tech, pharma, logistics, finance
Don’t Wait for a Tax Notice
Transfer pricing is no longer optional — it's a non-negotiable global compliance standard. Shift by MLegal ensures your pricing is legally defendable, globally aligned, and tax-efficient.
