What are the documents required to be maintained by a
company while executing an international transaction?
The
following documents have to be maintained when a company is involved in an
international transaction.
The
details of the ownership of the person with respect to the company. These include the
ownership structure, the details of the shares, and information on ownerships
held by any other company on it.
A
detailed profile of the foreign group to which the assessed company is
associated with for the international transactions. The details such as name,
address, country where tax returns are filed, and the legal status, etc., have
to be furnished about the multinational group.
A
detailed description of the business activities of both the assessed person and
the associated group of companies with whom the former has been involved in
international transaction.
The
details of the international transaction, such as the nature of the
transaction, details of the property or services transferred, the terms
contained in the transaction, and the amount and value of each transaction.
The
details of the functions carried out by such a transaction, the details of the
risks involved and the value of the assets used or to be used by the assessed
or the associated company that is involved in such a transaction.
The
details of the records collected for the entire business or a particular
division of the business during the period of the company’s business activity
in which the foreign transaction has been involved. These include reports such
as the estimates made on various market trends, forecasts about the market,
budget analysis or any other such finance-related reports prepared by the
company.
The
details of the uncontrolled transactions, if any, that has taken place with a
third party during the period of the international transaction. The nature and
the terms and conditions of such transaction have to be mentioned as they play
an important role in deciding the value of the international transaction.
The
details of the analysis conducted in order to assess the impact of the
uncontrolled transaction on the international transaction concerned.
The
details of the various methods considered and the most appropriate method
adopted in deciding the arm’s length price with respect to an international
transaction. The details should also include the details on why the particular
method was adopted and how it was implemented successfully in order to decide
the arm’s length price and why other methods are rejected / not suitable to the
entity, have to be observed.
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