Month: June 2021

Deemed Associated Enterprises -Section 92A (2) There may be certain cases where enterprises may not fulfil the conditions under Section 92A (1) i.e. it would not fall under the definition of ‘Associated Enterprise’. The definition given is quite broad and isn’t sufficient to cover all possible situations to bring all enterprises operating in a similar … Read more

Associated Enterprises Transfer Pricing- Section 92A (1) Transfer Pricing provisions help in determining the price in a transaction between two or more international Associated Enterprises. The provisions of the Income Tax Act, 1961 define the term “Associated Enterprises” and also provide for situations where certain entities may also be defined as a ‘Deemed Associated Enterprise’. … Read more

Evolution of Transfer Pricing in India Before the amendments introduced in the Financial Act 2001, cross border transactions between MNEs were unregulated and sufficient taxation laws were not in place to curb unscrupulous acts such as tax evasion and ease conducting of international transactions. The Evolution of Transfer Pricing in India pre and post the … Read more

What is Transfer Price ? Although we have had a brief glimpse of the principle of transfer pricing, the question still remains: What is Transfer Pricing? MNEs with their Associated Enterprises enter into transactions at a price that are generally lower than the actual market price. Furthermore, MNEs set up business plans in order to … Read more

Meaning of Transfer Price Economies around the world in order to encourage healthy competition and inflow of foreign funds have liberalised their regulations and have provided environments for international transactions. The quintessence of each transaction: Price. The price at which international transactions take place is called Transfer Price. Let’s take a look to better understand … Read more

Applicability for Transfer Pricing in India With many nations exploring beyond their borders and investing in foreign economies, the principle of Transfer Pricing has become immensely important in the field of International Taxation. Quantum of tax liability in an international transaction has become difficult to determine, since they operate outside the jurisdiction of domestic laws … Read more

Need for Transfer Pricing With the advent of globalisation, transactions across borders have increased manifold, thus operating outside the jurisdiction of domestic laws. Within an unregulated environment, tax evasions and other such unscrupulous activities are bound to happen. In order to prevent such mis-happenings the principle of Transfer Pricing was introduced. Let’s take a brief … Read more

Advance Pricing Agreement (APA) Transfer Pricing a) An Advance Pricing Agreement (APA) is an agreement between a tax payer/applicant and the CBDT, i) which determines the arm’s length price of future intercompany transactions; or ii) determines the manner in which ALP is to be computed. b) APA can also be used for existing intercompany transactions (i.e., … Read more

Meaning of Mutual Agreement Procedure (MAP) Transfer Pricing Mutual Agreement Procedure (MAP) is a special facilitative procedure set out in various tax treaties that allows designated government representatives of Treaty partners (”referred to as Competent Authorities”)  to work together, and resolve  international tax disputes, including cases of double taxation arising out of application of the … Read more