What are the transfer pricing documentation requirements?

Indian transfer pricing regulations require maintaining extensive documentation in the form of an Accountant’s Report, local file, master file, and Country-by-Country Report (for international groups). The local file contains entity-level details like business description, transactions, comparability analysis etc. The master file gives an overview of the multinational group. Prescribed reports need to be filed annually along with the tax return. Significant penalties can be levied for non-compliance or incorrect reporting.