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India: Transfer pricing proposals in Union Budget 2020

India: Transfer pricing proposals in Union Budget 2020

The Union Budget 2020 was presented on 1 February 2020 and includes the following transfer pricing-related proposals.


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  • The determination of profits attributable to a permanent establishment (PE) in India of a non-resident brought would be within the scope of the advance pricing agreement (APA) rules and the safe harbour regime.
  • The interest paid to an Indian PE (branch) of a non-resident bank would be excluded from the application of the thin capitalisation rules under the transfer pricing provisions.
  • All the provisions that mandate filing of an audit report along with the return of income or by the due date of filing of return of income would be amended to require the same to be furnished at least one month prior to the due date of filing of such return of income. This amendment also would apply to the transfer pricing accountant’s report. This amendment would be effective retroactively from FY19-20.

Read a February 2020 report [PDF 1.2 MB] prepared by the KPMG member firm in India

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