Documentation Threshold: The Trigger for the TP Documentation Duties
The documentation threshold defined: the revenue or transaction-value limit that triggers the TP documentation obligations — the Local File, the Master File and the CbCR triggers.
Definition
The documentation threshold is the revenue or transaction-value limit that triggers the transfer pricing documentation obligations — the line the entity or the group crosses, and above which the documentation duty attaches (the Local File, the Master File, the CbCR, each on its own threshold). Below the threshold, the transaction may still be examined under the arm’s length rule (the s.92 pricing applies to the in-scope transaction regardless) — but the documentation duty (the prepared, maintained, produced file) is the threshold’s consequence. The thresholds, in the India convention (the compliance calendar has the full table):
| The tier | The threshold (the India convention) | The trigger | The obligation |
|---|---|---|---|
| Local File (Rule 10D) | ₹300 million aggregate value of the international + specified domestic transactions (in the year) | The entity’s transaction value crossing the line | The Local File prepared (the 30-day window), maintained (8 years), produced (the 282BC notice) |
| Master File (Rule 10DA) | ₹1,000 crore aggregate group revenue (the preceding FY) | The group’s revenue crossing the line | The Master File maintained (the designated entity), available on request |
| CbCR (Rule 10DB) | ₹1,000 crore consolidated group revenue | The group’s revenue crossing the line | The CbCR filed (the Form 3CEB / 3CEBA, with the return) |
The working reads (the documentation guide and the jurisdiction comparison):
- The threshold is the duty’s trigger, not the examination’s. Below the threshold, the in-scope transaction is still examined under the arm’s length rule (the s.92 pricing, the TPO’s jurisdiction) — the documentation duty (the prepared file) is what the threshold gates, not the pricing rule. The sub-threshold entity is examined on its facts, without the Rule 10D file obligation.
- The thresholds are localised (the OECD’s BEPS Action 13 standard, the local figures) — the India figures (the ₹300 cr, the ₹1,000 cr) against the OECD’s (the €750m) and the other jurisdictions’ (the jurisdiction comparison table) — the group’s global position (above / below, per jurisdiction) is the compliance calendar’s first check.
- The measurement is the year’s (the transaction value in the year, the group revenue in the preceding FY) — the threshold test is annual, and the crossing (the year the entity / the group crosses the line) is the year the duty attaches, documented on the compliance calendar.
Example
The Indian entity: the international + specified domestic transactions’ aggregate value in the FY is ₹350 million — above the ₹300 million Local File threshold. The Local File duty attaches: the file prepared within the 30-day window (by 31 May), maintained for 8 years, produced on the 282BC notice. The group: the consolidated revenue (the preceding FY) is ₹1,200 crore — above the ₹1,000 crore Master File / CbCR threshold. Both duties attach: the Master File maintained (the designated entity), the CbCR filed (the Form 3CEB / 3CEBA, with the return). The calendar’s first check, year by year: the transaction value, the group revenue, the thresholds, the crossing — the duties that attach, the deadlines that run.
See also
FAQ
Does the threshold apply to the pricing, or only to the documentation? Only to the documentation duty. The arm’s length pricing (the s.92 rule) applies to the in-scope transaction (the associated persons, the ₹30 million / 10% test) regardless of the documentation threshold — the sub-threshold entity’s transaction is still priced at arm’s length and examinable. The threshold gates the prepared file (the Rule 10D obligation), not the pricing rule — the distinction the s.92 overview keeps separate.
What is the difference between the entity threshold and the group threshold? The entity threshold (the Local File’s ₹300 cr — the entity’s transaction value) triggers the entity-level file (the Local File, the FAR, the benchmarking). The group threshold (the Master File / CbCR’s ₹1,000 cr — the group’s consolidated revenue) triggers the group-level files (the Master File, the CbCR — the structure, the intangibles, the jurisdictional allocation). The entity below the entity threshold but in a group above the group threshold: the group carries the Master File / CbCR, the entity does not carry the Local File (the duty is per-entity on the entity threshold). The compliance calendar has the per-tier triggers.
Do the thresholds change over time? The figures are the notified ones (the Finance Act / the notification sets them, the compliance calendar carries the current figures) — the practice is to run the threshold test on the current year’s figures, against the current notified limits. The jurisdiction comparison keeps the thresholds per jurisdiction current (the localisation, the OECD’s reference) — the group’s global position (per jurisdiction, above / below) is the annual check, on the calendar.
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Related docs
Local File (Rule 10D): Definition, Triggers and Contents
The Local File defined: the entity-level transfer pricing documentation under Rule 10D — triggered at ₹30 cr revenue, containing the FAR, method, benchmarking and the computation.
Read docMaster File (Rule 10DA): Definition, Triggers and Contents
The Master File defined: the group-level transfer pricing documentation under Rule 10DA — group structure, businesses, intangibles and the financial and tax positions.
Read doc