New Delhi, 23 September (H.S.): Union Finance Minister Nirmala Sitharaman on Wednesday said disputes related to transactions between companies and their subsidiaries, particularly transfer pricing matters, place a disproportionately heavy burden on developing countries.

Addressing a meeting of the heads of tax authorities from BRICS countries in New Delhi, Sitharaman said India had advocated the creation of two new BRICS working groups on taxation. The meeting will consider the terms of reference for the proposed groups, which will focus on international taxation and transfer pricing, and on revenue statistics.

The Finance Minister said the proposed working groups would establish a permanent institutional mechanism to sustain cooperation and ensure continued progress irrespective of which country holds the BRICS presidency.

Sitharaman said the framework would remain in place beyond India’s presidency. She noted that international tax rules are currently being renegotiated through several multilateral tax discussions, including the ongoing negotiations on the United Nations Framework Convention on International Tax Cooperation.

She said existing global revenue frameworks do not adequately reflect the fiscal realities of developing countries, which can affect both their international standing and the functioning of their tax systems. Transfer pricing disputes, she added, impose significant costs on developing-country tax administrations in terms of resources, time and administrative capacity.

India strongly supported the establishment of the two working groups at the meeting to deepen tax cooperation, Sitharaman said, adding that the initiative had also received recognition in the BRICS leaders’ declaration.

The international taxation and transfer pricing working group would provide a continuing platform for BRICS members to exchange experiences on treaty interpretation, transfer pricing audits and Advance Pricing Agreements (APAs). The revenue statistics group, meanwhile, would work towards developing a framework for measuring fiscal performance that reflects the ground realities of BRICS economies rather than directly applying models developed for Western or other advanced economies.

Sitharaman emphasised that ongoing global discussions on cross-border taxation and the UN framework for tax cooperation would shape international tax rules for an entire generation. As major developing economies and source jurisdictions, she said, BRICS countries have an important collective role in ensuring that these rules are fair, balanced and sustainable.

India also shared its experience of using digital infrastructure and technology to modernise tax administration. Sitharaman said BRICS countries had shown considerable interest in systems such as faceless assessments, pre-filled tax returns, real-time invoice authentication and AI-based taxpayer assistance.

According to the Finance Minister, these technology-driven measures can improve the accuracy and efficiency of tax administration while reducing the scope for individual discretion.

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Hindusthan Samachar / Jun Sarkar