The Role of Human Resources in New Transfer Pricing Regime

Introduced in 2001, transfer pricing (TP) rules in India have undergone a sea change and now with the inclusion of advance pricing agreements (APAs), safe harbour rules (SHRs) and more recent rules such as APA rollback, etc. the new TP regime is aimed to reduce litigations, provide more transparency and attract FDI into the country. However, one of the major concern in this area is the lack of human resources, both in terms of number as well as the capabilities of available manpower for both sides viz. the tax authority and the tax payers (MNCs) to deal with this subject efficiently and the gap between the demand and supply of trained and skilled officers/executives has widen significantly and is growing further. The new TP regime thus, needs more trained/skilled human resources than ever before, if the country has to provide an efficient TP regime. In this background this paper first attempt to describe the relevant concepts of TP and then highlights the significance of human resources to turn the new TP system an efficient one in the global arena, not only to reduce the litigations, but also to attract more foreign technology and FDI into the country