Transfer Pricing For AI, Cloud, And Data-Driven Service Centres: Benchmarking The Next-Generation Global Capability Centre

Introduction

The Global Capability Centres (GCCs) in India have advanced significantly since the time when they were in the form of voice-based call centres and back office operations, during the early 2000s. Many of these centres have been set up as centres of excellence in the areas of artificial intelligence, cloud engineering, and data science, enabling the processes of model training, database management, and platform development for the organization as a whole. This represents a departure from the practice of implementing transfer pricing framework in connection with ordinary activities involving low-level risk ICT, enabled service providers, who would be compensated at low margins.

In this blog, we will therefore consider the issues that are related to benchmarking the processes of support services and R&D in connection with the DEMPE framework, what problems arise with respect to intangible ownership and markup, as well as what documentation issues are likely to result in