| | AUGUST 20169Consultants Reviewresulting in post-mortem of the group company (related-party) transactions at the time of preparation of Accountant's Report to be filed along with the annual corporate tax return. This eventually results in real unproductive time by running from pillar to post to "somehow satisfy" the tax consultant who would issue the Accountant's Report. To make the situation worse, the person involved in finalizing the transfer pricing study does not remain with the company when the transfer pricing audit is actually conducted after virtually three years of relevant year closure.In these situations, rather than blaming the revenue officials for making huge adjustments, it would be a real good idea to introspect and attempt to make some procedural changes which could easily help in facing the difficult requirement of `contemporaneous documentation'.Some of the suggested changes which could easily be implemented by the corporates to overcome the above mentioned challenges are (i) spread awareness amongst all the business units and sub-departments of what is transfer pricing and what is really required out of them (ii) implement the process of real-time documentation by having the group company agreements run past through the in-house tax personnel/tax team which could raise the red-flags well in advance resulting in absolute avoidance of any transfer pricing issue rather than trying to salvage the situation at the time of transfer pricing audit (iii) implement the process of holding periodic discussions individually with each business unit to ensure that not a single group company transaction is missed out from reporting in the Accountant's Report thereby leaving the company with a potential risk of penalty on account of non-reporting of transactions (iv) one can also have a very simple process of maintaining documentation to prove that the payments are towards genuine services from group companies by collating the relevant attendance logs, correspondence emails, plans & projections, presentations, etc. before approval from finance department towards any remittance against those services. Rather than blaming the revenue officials for making huge adjustments, it would be a real good idea to introspect and attempt to make some procedural changes
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