Bloomberg Tax
June 11, 2020, 6:54 PM

India Vows Flexibility on Intercompany Transactions Amid Virus

Rossella Brevetti
Rossella Brevetti

The Indian government will be sensitive to changes companies make in their intercompany pricing transactions as a result of the Covid-19 pandemic, a tax officer said.

There is no reason that a change of transfer pricing arrangements can’t be accepted as long as taxpayers do their work and provide appropriate documentation, Sobhan Kar, a director at the Indian income tax department, said during a webinar Thursday hosted by the Indian branch of the International Fiscal Association.

“How and why it will happen will be dependent on the facts of each case,” he said. Transfer pricing values intercompany transactions based on the arm’s-length principle—how unrelated companies would transact.

Companies will need to provide comparatives—real world alternatives—from the markets where they operate, Kar said.

India hasn’t issued transfer pricing guidance because the crisis is still in its “early days,” he said. Such guidance, available both in domestic law and from the OECD, remain the same, he added.

Kar said India’s tax authorities will listen to the taxpayer on the impact of the Covid-19 crisis on advance pricing agreements—under which a taxpayer enters into an agreement with one or more tax authorities to establish a pricing method for a specific set of related-party transactions.

“We are flexible. We are willing to look at all the completed APAs,” he said.

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To contact the reporter on this story: Rossella Brevetti in Washington at

To contact the editors responsible for this story: Meg Shreve at; Vandana Mathur at