Transfer Pricing Documentation India - Local File Master File CbCR Form 3CEB | Expert CA

Transfer Pricing Documentation in India

Local File, Master File, Country-by-Country Report and Form 3CEB Under the Three-Tier TP Framework

Transfer pricing documentation in India follows a three-tier structure aligned with the OECD BEPS Action 13: the Local File (entity-specific TP documentation under Section 92D), the Master File (group-level TP information for MNE groups with consolidated revenue above Rs 500 crore), and the Country-by-Country Report (CbCR) (for MNE groups with consolidated revenue above Rs 5,500 crore). Additionally, Form 3CEB -- the CA-certified accountant's report under Section 92E -- must be filed with the income tax return by all taxpayers with aggregate international transactions exceeding Rs 1 crore.

Each tier serves a different purpose: the Local File provides the detailed arm's length analysis for specific transactions; the Master File gives the tax authority a high-level view of the group's TP policies; and the CbCR enables assessment of high-level BEPS risks across all jurisdictions. Our team prepares comprehensive, OECD-compliant TP documentation across all three tiers -- connected with the TP study, benchmarking analysis, and audit defence services.

Three-Tier TP Documentation Requirements in India

Document	Who Must Maintain	Filing Requirement	Penalty
Local File (Section 92D)	Taxpayers with international transactions above Rs 1 crore or SDTs above Rs 20 crore	Maintained by ITR due date; submitted to TPO within 30 days of requisition	2% of transaction value under Section 271AA
Master File (Form 3CEAA)	Indian entities of MNE groups with consolidated revenue above Rs 500 crore	Filed with Designated Authority (DGIT International Taxation) by ITR due date	Rs 5 lakh per failure to furnish
Country-by-Country Report (Form 3CEAC)	Indian UPEs of MNE groups with consolidated revenue above Rs 5,500 crore	Filed within 12 months of end of reporting accounting year	Rs 5,000 to Rs 50,000 per day of delay
Form 3CEB	Taxpayers with international transactions above Rs 1 crore	Filed with income tax return (October 31 / November 30)	Rs 1 lakh under Section 271BA

Our TP Documentation Services

Local File Preparation

Comprehensive Local File -- entity and industry overview, intercompany transaction description, FAR analysis, method selection rationale, comparables search, benchmarking, and ALP determination for each transaction category.

Master File Preparation

Master File covering MNE group structure, business description, intangibles, intercompany financial activities, and financial/tax positions -- in the prescribed format for Form 3CEAA filing with the Designated Authority.

Country-by-Country Report

CbCR preparation and filing for Indian UPEs -- covering revenue, profit/loss, tax paid, stated capital, accumulated earnings, employee count, and tangible assets for each jurisdiction where the group operates.

Form 3CEB Certification

CA-certified Form 3CEB covering all international transactions -- details, methods used, ALP determined, and arm's length compliance confirmation -- filed with the income tax return by the due date.

TP Policy Design

Design and documentation of group-level TP policies for intragroup services, IP licensing, financing, and procurement -- ensuring consistency between policy, intercompany agreements, and actual conduct of transactions.

Intercompany Agreements Review

Review and drafting of intercompany agreements to ensure alignment with the TP policy, actual conduct, and arm's length pricing -- critical documentation evidence in any TPO audit.

Frequently Asked Questions

What must a Local File contain under Indian TP regulations?

The Local File (Rule 10D) must contain: description of the taxpayer's business and industry; nature and terms of international transactions; FAR analysis (functions performed, risks assumed, assets employed by taxpayer and AEs); economic and market conditions analysis; business strategies; most appropriate method and selection rationale; controlled and uncontrolled comparables; arm's length price determination; adjustments made; and any other relevant information. It must be furnished to the TPO within 30 days of requisition and failure to do so attracts a 2% of transaction value penalty under Section 271AA.

Which Indian companies must file a Master File?

Every Indian constituent entity of an MNE group with consolidated group revenue exceeding Rs 500 crore in the preceding year must file a Master File (Form 3CEAA). Part A (basic information) must be filed by all Indian constituent entities; Part B (full Master File) only if the Rs 500 crore threshold is met. Both parts must be filed with the Designated Authority (DGIT International Taxation) by the ITR due date -- October 31 or November 30 depending on the assessment year.

What is the CbCR threshold and who files it in India?

An Indian company that is the Ultimate Parent Entity (UPE) of an MNE group with consolidated group revenue exceeding Rs 5,500 crore (approximately EUR 750 million) must file a Country-by-Country Report (Form 3CEAC) within 12 months of the end of the reporting accounting year. Indian constituent entities of foreign MNE groups may also be required to file a surrogate CbCR or a CbCR notification, depending on whether the foreign ultimate parent's country has a qualifying CbCR exchange arrangement with India.

Need OECD-Compliant TP Documentation? Our Team Delivers Audit-Ready Reports.

Local File, Master File, CbCR, and Form 3CEB -- complete three-tier TP documentation from our specialist team.