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
Transactional Net Margin Method The application of Arm’s Length Principle while implementing the provisions of Transfer Pricing, to arrive at the price of a transaction between unrelated parties is essential. However different situations call for application of different methods of the ALP principle, depending on the mitigating factors in every transaction. One such method is … Read more
Profit Split Method Transfer Pricing The application of Arm’s Length Principle while implementing the provisions of Transfer Pricing, to arrive at the price of a transaction between unrelated parties is essential. However different situations call for application of different methods of the ALP principle, depending on the mitigating factors in every transaction. One such method … Read more
Cost Plus Method Transfer Pricing The application of Arm’s Length Principle while implementing the provisions of Transfer Pricing, to arrive at the price of a transaction between unrelated parties is essential. However different situations call for application of different methods of the ALP principle, depending on the mitigating factors in every transaction. One such method … Read more
Resale Price Method Transfer Pricing The application of Arm’s Length Principle while implementing the provisions of Transfer Pricing, to arrive at the price of a transaction between unrelated parties is essential. However different situations call for application of different methods of the ALP principle, depending on the mitigating factors in every transaction. One such method … Read more
Functions, Assets and Risk Analysis Another method that can be used for calculating the transfer price in an international transaction between Associated Enterprises is the Functions, Assets and Risk Analysis Method. It is quite broad and dynamic since it takes into account the various business models (functions, assets and risks) of an enterprise involved in … Read more
Country by Country Reporting (CbCR) Transfer Pricing Generally, the group structure of a MNC would be as under : – Ultimate Parent company, say in USA; Regional Holding companies – Say one for Asia (Regional Holding company 1) which is a subsidiary of the US company and owns all the companies in Asia, one for … Read more