Accountant's Report Made More Exhaustive & Onerous

The Finance Act 2012, extended the applicability of transfer pricing provisions by widening the definition of International Transactions and extending transfer pricing provisions to specified domestic transactions. In order to align the reporting requirements with the extended scope of transfer pricing provisions, the CBDT has issued a notification amending the accountants report (Form 3CEB). The amended report now requires separate disclosure for International transactions such as Issue/ subscription of shares, guarantees, business reorganisation etc. Additionally, the report also requires separate disclosure for specified domestic transactions. This implies that the taxpayers now need to exercise prudence at the time of disclosure and reporting of all transactions in order to avoid attraction of penalties. By introducing compulsory reporting requirements, the intention of the tax authorities to bring in wide range of transactions under the ambit of transfer pricing provisions is clear.The attached SKP Tax Alert  provides details of the changes made.

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