Over the past two decades, India has witnessed an evolution in Transfer Pricing (TP) regulations. With each passing year, the focus of the legislators has been on qualitative aspects of TP, i.e., aligning with OECD TP guidelines, BEPS Actions 8-10, global best practices (using multiple-year data, introducing range concept, etc.). Aspects, such as value creation, delineation of transaction, structured approach to risk analysis, etc., have gained significance in any TP analysis. As a corollary, the utility of TP analysis/documentation extends well beyond that undertaken for TP compliance or APAs. Today, it is common for a customs department to make a request for TP analysis; furthermore, robust analysis/documentation is a fillip to good corporate governance (around related party transactions), as well.

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