How many tests determine AE status?

Section 92A(2)(a)–(m) lists 13 deeming tests. Even one clause is sufficient to establish AE status (Section 92A(1) proviso).

What happens if we are AEs?

Every international transaction between AEs must be priced at arm's length under Section 92. Documentation under Rule 10D is required if aggregate international transactions exceed ₹1 crore.

Associated Enterprise Check — Section 92A AE Determinator | Harun Raaj & Associates

Associated Enterprise Check

Tick the clauses under Section 92A(2) that apply to your two entities. Even one clause is sufficient to establish AE status (Section 92A(1) proviso).

(a) Equity held ≥26% (direct/indirect)(b) Loans ≥51% of book-value of total assets of the other enterprise(c) Guarantees ≥10% of total borrowings of the other enterprise(d) ≥50% of directors/members of governing board appointed by that enterprise(e) ≥50% of directors appointed jointly by two enterprises (mutual control)(f) Manufacture/processing wholly dependent on knowhow, patents, copyrights, trademarks, etc. of the other enterprise(g) ≥90% of raw materials/consumables sourced from the other enterprise(h) Goods/articles sold to the other enterprise and prices/conditions are influenced by it(i) One enterprise is controlled by an HUF/individual and the other by a relative(j) One enterprise controls the other in any other manner(k) Both enterprises under common control of a third enterprise (direct/indirect)(l) Manufacturing/processing dependent on technical knowhow at direction of the other enterprise(m) CBDT notified — catch-allAdditional: Are both in the same group (parent-subsidiary or sister concern)?

AE Relationship: Not triggered by these facts

Section 92A(2)(a)–(m), Income-tax Act 1961.

Hub Guide · Transfer Pricing

Go deeper — the Transfer Pricing hub

Section 92–92F compliance cascade: Form 3CEB, Safe Harbour (Rule 10TD), Master File (Rule 10DA), and CbCR (Rule 10DB).

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